Mining Stocks With Sustainable Yields Greater Than 5-Year Treasuries

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 |  Includes: AA, ARLP, AUY, BHP, CCJ, FCX, GG, IAG, NEM, RIO, SLW, VALE
by: Sammy Pollack

Buying mining stocks with dividends offers a good way for investors to both generate yield and benefit from growth. This article will list mining stocks with yields that are higher than the 10-year treasury (currently 0.72%) and payout ratios that are less than 50%. Having a low payout ratio is important because the volatility in commodity prices often leads to massive swings in earnings power. Miners who have a lower payout ratio are better positioned to maintain the dividend over the long run.

Freeport McMoran (FCX)

  • 2.16% Yield
  • 21% Payout Ratio
  • Copper producer

Newmont Mining (NEM)

  • 2.28% Yield
  • 30% Payout Ratio
  • Gold producer

IAMGOLD (IAG)

  • 1.48% Yield
  • 23% Payout Ratio
  • Gold producer

Yamana Gold (AUY)

  • 1.15% Yield
  • 24% Payout Ratio
  • Gold producer

Silver Wheaton (SLW)

  • 1% Yield
  • 27% Payout
  • Silver producer

Goldcorp (GG)

  • 1.13% Yield
  • 24% Payout Ratio
  • Gold/Silver producer

Cameco Crop (CCJ)

  • 1.68% Yield
  • 42% Payout Ratio
  • Uranium

Alcoa (AA)

  • 1.18% Yield
  • 23% Payout Ratio
  • Aluminum

Rio Tinto (RIO)

  • 1.9% Yield
  • 14% Payout Ratio
  • Diversified miner

BHP Biliton (BHP)

  • 2.72% Yield
  • 26% Payout Ratio
  • Diversified miner

Alliance Resource Partners LP (ARLP)

  • 4.98% Yield
  • 48% Payout Ratio
  • Coal producer

Vale (VALE)

  • 6.68% Yield
  • 38% Payout Ratio
  • Diversified miner

Conclusion

These are not the highest-yielding mining stocks, but the dividends for these companies look sustainable. Owning these stocks represents a solid way to generate income and benefit from any potential global growth. These stocks also serve as great inflation protection. Few other high-yielding stocks would benefit from high inflation.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.