Newmont (NEM) Hikes Quarterly Dividend On Strong Financials

Newmont Mining Corporation’s (NYSE:NEM) board has announced an increase in its quarterly dividend from 7.5 cents to 14 cents per share of common stock. The revised dividend is payable on Mar 22, to stockholders on record as of Mar 8.

Notably, the company’s latest hike is nearly three times higher than the dividend announced in the year-ago quarter. This reflects a strong financial position and a steady long-term production profile. The company continues to generate superior returns while investing in the next generation mines.

In third-quarter 2017, Newmont’s operating cash flow increased roughly 35% year over year to $688 million, owing to reduction in taxes and working capital paid. The company’s free cash flows increased 107% to $494 million on the back of lower capital expenditures and higher sales volumes. It also had roughly $3 billion cash in hand as of Sep 30, 2017.

Newmont is also committed to de-lever its balance sheet. At the end of the third quarter, it reduced net debt by more than 77% to $1.1 billion. Debt reduction efforts will help the company to lower its interest liability, improve cash flows and boost margins.

Shares of Newmont have moved up 4.6% in the past three months, outperforming the 4.1% decline recorded by its industry.

Zacks Rank & Key Picks

Newmont currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Steel Dynamics, Inc. (NASDAQ:STLD) , The Mosaic Company (NYSE:MOS) and United States Steel Corporation (NYSE:X) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Steel Dynamics has an expected long-term earnings growth rate of 12%. Its shares have soared 43.9% over the last six months.

Mosaic has an expected long-term earnings growth rate of 9.5%. Its shares have moved up 34.2% over the past six months.

U.S. Steel has an expected long-term earnings growth rate of 8%. Its shares have rallied 84.8% over the last six months.

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