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Best Dividend Paying Gold Stocks for 2013 and Beyond

By Edited Nov 13, 2013 0 0


Are you wondering what are the best dividend paying gold stocks for 2013 and beyond? I love both gold stocks – that is, stocks of gold mining companies – AND I love stocks that pay a nice dividend. So, put the two together, and we have quite the investment, in my opinion. I strongly urge you to take a look at these top Canadian dividend paying stocks, as I feel they are a great opportunity going forward.

Why is gold a great investment for 2013?           

As you can tell, I really like gold as an investment for 2013 and beyond. With the federal reserve bank of the US and other banks around the globe printing money at a rapid pace, this will lead to inflation and a devaluation of the currencies.

What this means is things like food and energy will start costing more money. However, precious metals prices will also rise as investors flee the dollar and other currencies for hard assets such as gold. Investors will do this because it protects their purchasing power during times of big inflation or currency devaluation.

Why Does Gold Rise in Price?

It is crucial to understand why gold has risen from $300 an ounce in 2001 to over $1,700 an ounce today. In the US, we simply have to just look at this chart below. It shows that as the US debt increases, the price of gold increases as well.

Gold Price Debt

 *The price of gold increases to reflect the amount of debt, as well as the value of the country’s currency.


Silver Could Hit $50 in 2013

2011 American Silver Eagle Coin in "Air-Tite" Capsule
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I believe silver makes just as great as an investment as gold. The reason is because silver is used in many industrial applications, in things we use everyday. The biggest growing use for silver is in solar panels and in investment coins and ETFs. I think silver can reach as much as $50-60 an ounce in 2013, and long-term I see it reaching well over $100 an ounce.

Gold Price Targets for 2013

Many investors out there are calling for higher gold prices in 2013, with targets ranging from $1,900 all the way to $2,500 and $3,000. I think we will see gold hit $2,000 in the middle of 2013 as the money the Federal Reserve has printed finds its way into the economy.

Long-term, I do believe that gold will head to $10,000 an ounce. I believe this can happen as soon as 2015-16.

What is a Gold Streaming Company, and how is it different from a gold mining stock?

Buying physical gold such as coins and bars is the safest bet you can make. However, if you are looking for leverage and bigger returns, and willing to take a little risk, you should take a strong look at the gold streaming companies.

These companies differ than gold mining companies because they don’t actually mine gold. They are financing companies for miners – they give them money for their mine, and they receive a portion of the gold produced at a fixed price.

This is genius because they are not affected by higher operating costs and they are considered much safer because they have deals with many different mines, giving them much diversity

Top 3 Best Gold Stocks That Pay a Dividend

Here are my top choices for 2013 and beyond.

#3 Franco Nevada Corporation

Franco Nevada is a gold streaming company but they also have Platinum Group Metal streams and oil streams.The majority of revenues are generated from high margin assets in North America and in safe regions. Their current dividend yield is 1.20 percent with a stock price of $58.22.

I see big upside potential in this company and their potential to increase dividends. My price target for 2013 is $65 a share and I think they will raise their dividend by at least 30 percent in 2013.  

They also pay a MONTHLY dividend, which I think is really more convenient that getting a dividend each quarter! (For other monthly dividend paying equities, please read this.)

#2 Royal Gold 

Royal Gold is a beautiful company. They are a gold streamer, like Franco Nevada, but they focus mainly on gold.

Their current price is around $80 a share and projected earnings for 2013 are $2.93 per share, giving them a forward price to earnings ratio of 27. While that doesn’t sound cheap, you must realize that gold streaming companies generally trade with P/E’s around 45 or so.

They have a track record of increasing their dividend. Last year’s total payout was .44 cents a share, and this year’s should come in around .60 cents.

My price target for this stock is $95 in 2013.

#1 Newmont Mining

Although Newmont Mining is not a gold streaming company, I really like them. They are a gold stock with a unique dividend policy – they pay dividends based on the actual price of gold!

Check out a chart of Newmont’s dividend policy below. Also keep in mind that the current share price of Newmont is $44.52.

The current yield is 3.20 percent. So if gold shoots up to $2,000 an ounce and somehow the market tanks along with Newmont, we could see a dividend yield above 10 percent easily.  That is the beauty of this unique dividend policy linked to the price of gold. 

Newmont Dividend

Or, Buy Physical Gold Instead

Like I mentioned above, if you want to play it safe, physical gold is the safest investment you can make. With gold going to $5,000 and above, you are pretty much guarenteed to make some money by buying some gold coins or bars.

You also don't have to buy a full one ounce gold coin, if you can't afford it. You can buy gold in fractional amounts instead. Here is one of the best ways to buy physical gold below.

Pamp Suisse Gold Bar for Cheap

DISCLOURE: This is not investing advice or recommendation. This post is for informational purposes ONLY! Do you own due diligence when investing.

Thanks for reading this article on the best dividend paying gold stocks for 2013!



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