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Will Gold Stocks Ever Be Dividend Stocks Again?

Aaron Levitt Oct 26, 2016


According to Warren Buffett, gold doesn’t fit the definition of an investment. One of the biggest criticisms of owning gold is that it doesn’t throw off any profits. Unlike a stock or a bond, there’s no way to extract value from it, aside from selling it. There are no cash flows, no golden dividend. It just sits there.

So if you wanted those profits, then you had to bet on one of the various gold miners. And even then, dividends were pretty scarce.

But for a short time, the gold miners were just as big of dividend payers as utilities, REITs and other income-focused sectors. The question for dividend investors now is whether they’ll become that big again.

High Price of Gold Drove Cash Flows

Currently, of the twenty gold stocks that Dividend.com tracks, only a small handful of them pay any sort of dividend. And even then, the average yield for the sector is only a paltry 1.38% – hardly enough to get a real dividend hound’s blood pumping. (Historically, gold mining hasn’t been a dividend-friendly industry, but Utilities, REITS, MLPs and Telecommunications are. Find out why here.)

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