More dividend cuts could be in store at Newmont Mining, Citi analyst says


On a day when most gold miners are in the green or at least staying near breakeven, Newmont Mining (NEM -4.3%) has plunged after reporting weaker than expected Q4 earnings and cutting its dividend.

Citigroup’s Brian Yu thinks further cuts in NEM's gold-linked dividend could be on the way; beginning in Q2 2014, payout levels are reduced and based on the updated formula and Citi’s average 2014 gold price forecast of $1,255/oz, dividend payouts for the remaining three quarters of 2014 would decline 83% to $0.075/share from $0.450, enabling NEM to retain an additional $187M in cash.

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Comments (11)
  • MisterJ
    , contributor
    Comments (1157) | Send Message
     
    Gold miners are a good trade sometimes, but a horrible investment for sure.
    21 Feb 2014, 02:21 PM Reply Like
  • omarbradley
    , contributor
    Comments (966) | Send Message
     
    well...they shouldn't be complaining about price here that's fer sure.

     

    huge pop to start the year...the equities have been by far the worst performer since 2008...maybe this summer will be a good time to start putting some serious capital to work in this space.

     

    i do agree "no need to Russian" here...so to speak.
    21 Feb 2014, 02:24 PM Reply Like
  • ihadnihn
    , contributor
    Comments (55) | Send Message
     
    Horrible investment in recent years, things change...or gold is going out of business soon. Recently long multiple miners on a 1-5 year plan.
    23 Feb 2014, 09:28 AM Reply Like
  • sethmcs
    , contributor
    Comments (3520) | Send Message
     
    Old news. Dumped NEM yesterday upon reading the dividend announcement. Yep it was buried in there. Always pays to read every announcement on all of your holdings.
    21 Feb 2014, 04:59 PM Reply Like
  • ihadnihn
    , contributor
    Comments (55) | Send Message
     
    Seems like a strange time to jump ship, at least for anyone with a relatively long plan. I'd understand selling NEM at $60 or $40, but not at $20 due to dividend cuts. The risk/reward in the miners is too great for me to pass up, about 20% of my portfolio is miners as of recent weeks, not heavily weighted in any particular one but NEM is one of them now. I'm confident I'd at least break even in the following years, worst case scenario.
    23 Feb 2014, 09:28 AM Reply Like
  • Ohrama
    , contributor
    Comments (568) | Send Message
     
    "dividend payouts for the remaining three quarters of 2014 would decline 83% to $0.075/share from $0.450"
    Like tax hikes, dividend payout reductions are always temporary, I suppose. I bought 1000 at the bottom a month ago and made some good gain to see part of it evaporate today. Cashed in the remaining gain!
    21 Feb 2014, 06:32 PM Reply Like
  • minecanary
    , contributor
    Comments (1141) | Send Message
     
    It's the SA jokers attempt to get a dig at gold that is pitiful. If the miners are staying green and the yellow stuff is way ahead of equities on the day, how are they struggling? These folks act like they're at CNN tryouts.
    21 Feb 2014, 11:29 PM Reply Like
  • june1234
    , contributor
    Comments (4188) | Send Message
     
    Commodity index is up 12% this year while the S&P is up a tad
    22 Feb 2014, 02:33 AM Reply Like
  • Smarty_Pants
    , contributor
    Comments (3189) | Send Message
     
    Meanwhile the Market Vectors Gold Miners ETF is up nearly 25% YTD.

     

    http://yhoo.it/1fjAAHk;range=6m;

     

    It may be that NEM is struggling, but the sector seems to be improving recently.
    22 Feb 2014, 02:05 PM Reply Like
  • minin4au
    , contributor
    Comments (11) | Send Message
     
    you guys are aware that NEM linked the dividend to the gold price, right? This ill-advised strategy really bites in the downturns, and makes capital planning almost impossible. Their brain-trust is brain dead.
    26 Feb 2014, 08:28 PM Reply Like
  • minin4au
    , contributor
    Comments (11) | Send Message
     
    you guys are aware that the dividend is linked to the price of gold, right? This ill-advised strategy is going to bite them now. Their financial "brain trust" is brain dead.
    26 Feb 2014, 08:29 PM Reply Like
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