Assessing the Sustainability of Newmont Corp's Upcoming Dividend
Newmont Corp (NEM, Financial) recently announced a dividend of $0.4 per share, payable on 2023-12-22, with the ex-dividend date set for 2023-11-29. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Newmont Corp's dividend performance and assess its sustainability.
What Does Newmont Corp Do?
Newmont is the world's largest gold miner. It bought Goldcorp in 2019, combined its Nevada mines in a joint venture with competitor Barrick later that year, and also purchased competitor Newcrest in November 2023. Its portfolio includes 17 wholly or majority-owned mines and interests in two joint ventures in the Americas, Africa, Australia, and Papua New Guinea. The company is expected to produce roughly 7.3 million ounces of gold in 2023 pro forma for Newcrest on an annualized basis. Newmont also produces material amounts of copper, silver, zinc, and lead as byproducts from its various gold mines. It had about two decades of gold reserves along with significant byproduct reserves after acquiring Newcrest.
A Glimpse at Newmont Corp's Dividend History
Newmont Corp has maintained a consistent dividend payment record since 1986. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Newmont Corp's Dividend Yield and Growth
As of today, Newmont Corp currently has a 12-month trailing dividend yield of 4.57% and a 12-month forward dividend yield of 4.17%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Newmont Corp's annual dividend growth rate was 57.80%. Extended to a five-year horizon, this rate decreased to 56.20% per year. And over the past decade, Newmont Corp's annual dividends per share growth rate stands at an impressive 13.70%.
Based on Newmont Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Newmont Corp stock as of today is approximately 42.49%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Newmont Corp's dividend payout ratio is 0.00.
Newmont Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Newmont Corp's profitability 5 out of 10 as of 2023-09-30, suggesting fair profitability. The company has reported net profit in 6 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Newmont Corp's growth rank of 5 out of 10 suggests that the company has a fair growth outlook.
Revenue is the lifeblood of any company, and Newmont Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Newmont Corp's revenue has increased by approximately 4.30% per year on average, a rate that underperforms approximately 67.79% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Newmont Corp's earnings increased by approximately 11.90% per year on average, a rate that underperforms approximately 48.95% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 13.10%, which underperforms approximately 49.82% of global competitors.
Engaging Conclusion: Is Newmont Corp's Dividend a Golden Opportunity?
In conclusion, while Newmont Corp's dividend appears to be sustainable with a solid history and a high yield on cost, the projected decrease in the forward dividend yield and the mixed growth metrics present a nuanced picture. The payout ratio of 0.00, indicating no earnings or no dividend payout, raises questions about the current profitability and the ability to maintain dividends in the near term. However, the company's long-standing history of dividend payments may provide some reassurance to investors. As the mining giant integrates its recent acquisition of Newcrest, the future growth and dividend prospects of Newmont Corp may hinge on how effectively it leverages its expanded asset base and navigates the volatile commodities market. Value investors should consider all these factors in their analysis. Will Newmont's dividends continue to glitter, or will they need to dig deeper to sustain their payout? GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
