As the gold market heats up, miners are looking to share the wealth by introducing or increasing dividends. Does that mean they’re becoming a better investment?
Speaking to the Investing News Network, Marc Lichtenfeld, chief income strategist at the Oxford Club, said it’s important for investors to know why they’ve put money in a particular company.
“If you’re investing in a gold miner that has a variable dividend, but you’re investing for the capital gains potential, then that dividend is gravy. Anything that you get from it is wonderful,” he explained.
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“(But) if income is your main objective, then you do need to be very aware that that policy is variable, that the dividend will fluctuate,” added Lichtenfeld — in other words, it depends on your investing goals.
As Lichtenfeld
has previously discussed
, he’s optimistic about the outlook for gold moving forward, largely due to the vast amount of money printing happening worldwide, especially in the US.
“We don’t have a stimulus package happening right now, but … I think by next year, no matter who the president is, we will certainly have one,” he said. “Whatever it is, it’s going to be a very large number, and the US is just piling on the debt, just continuing to print money — that’s inflationary, and I think that’s going to be very positive for gold over the next several years.”
When asked if there are any mining stocks whose dividends look good right now, Lichtenfeld said nothing in the gold space is piquing his interest. But in terms of diversified miners he did point to Rio Tinto (ASX:
RIO
,NYSE:RIO,LSE:RIO), whose dividend is at about 5 percent currently.
“I think
iron
is going to have a big year next year,” said Lichtenfeld, noting that demand from China and the US should buoy the commodity. “I think Rio Tinto is going to do really well over the long term.”
Watch the interview above for more from Lichtenfeld on dividend investing and the overall market.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
