Gold bugs will be rewarded with richer dividend prospects than copper-company investors this year, though such perks may be short lived.
Miners of the precious metal are expected to more than double dividends this year to outpace the 75% hike of copper producers, according to Bloomberg dividend annual forecasts for Bloomberg Intelligence industry groups. The tables turn starting next year, with payouts from copper companies outdoing dividends from gold miners through 2023.
Copper’s prospects are improving, bolstering the case for investing in producers of the base metal. Prices for the industrial metal skyrocketed to the highest levels since 2011 last month as a series of measures to boost economic growth will likely see copper consumption outstrip near-term supply. Copper, used in wiring, electronics and piping, is often seen as a barometer for economic growth.
Gold miners are facing pressures after spot bullion prices have fallen 16% from all-time highs reached in August. Prices for the haven metal have slumped on bets of a brighter outlook for the global economy, outflows of gold exchange-traded funds, and expectations of higher inflation.
Barrick Gold Corp. and Agnico Eagle Mines Ltd. are among the 13 companies in Bloomberg Intelligence’s grouping for gold producers, while Freeport-McMoRan Inc. and Anglo American Plc are among those in the 30-company copper group.
Producers of bullion have done a better job of rewarding investors with dividend hikes than copper companies in the past couple years, thanks to their ability to generate excess cash from higher gold prices. AngloGold Ashanti Ltd. boosted its dividend more than fivefold this week after record gold prices boosted earnings, following similar moves by rivals including Newmont Corp.
(By Aoyon Ashraf and Yvonne Yue Li, with assistance from Zhuo Zhang and Shirley Yap)