Marc Faber, the famed investment advisor and fund manager, who has been referred to in the past as 'Doctor Doom', believes that we may be headed to a stock market crash, yet the gold mining stock sector is oversold and worth buying.
Gold and silver mining stocks have recently been depressed but rebounded sharply on Friday. If Faber is correct, then investors can not only achieve capital appreciation on their shares but also dividend income, as yields on these stocks are fairly high, compared to what you could receive from a bank account. Keep in mind though that some of the gold mining companies link their dividends to the price of gold, and even those that don't could easily cut their dividends if the price of bullion continues to drop. According to the free list of high yield gold mining stocks at WallStreetNewsNetwork.com, there are over 20 gold stocks that pay out dividend yields, ranging from 0.4% to over 6%.
Freeport-McMoRan Copper & Gold (NYSE:FCX) is a major producer in the precious metals sector. The world's largest publicly traded copper company, it also mines for gold, molybdenum, cobalt, silver, and several other metals. This Phoenix, Arizona miner has operations in North America, South America, Indonesia, and Africa. The stock trades at 11.3 times trailing earnings and 10.1 times forward earnings. Earnings for the latest quarter were down 32% on a revenue drop of 4%. The stock pays a very generous 4.0% yield, and dividends are paid quarterly.
Another high yield gold company is Yamana Gold, Inc. (NYSE:AUY), a Toronto, Ontario, Canada based miner which explores for and produces gold, copper, molybdenum, zinc, and silver, from its properties in Brazil, Chile, Argentina, and Mexico. The stock trades at 22.8 times trailing earnings and 16.6 times forward earnings. The latest quarterly revenues were down 19.6%. The stock pays a CD beating yield of 2.7%. Dividends for this company are also paid out quarterly.
For more of a solver play, there is Silver Wheaton Corp. (NYSE:SLW), the Vancouver, Canada company which yields 2.1%. The stock has a trailing P/E ratio of 14.5 and a forward P/E of 19.4. Revenues were actually up 3.1% but earnings dropped 9.3%.
The yields on these stocks can help reduce some of the volatility and return your capital quicker. Just remember, that companies can reduce (or increase) their yields at any time. For a list of the other high yield gold and silver mining stocks, which can be downloaded, sorted, and updated, go to WallStreetNewsNetwork.com.
Disclosure: I am long FCX.