Newmont ( NYSE: NEM ) closed -13.2% on Monday to its lowest since April 2020 after missing Q2 earnings estimates and issuing disappointing H2 guidance , which Andrew Bary at Barron's said could raise concerns about the security of its dividend .
Newmont ( NEM ) pays an annual base dividend of $1/share, which it says is sustainable down to a gold price of $1,200/oz, and has paid an incremental annual dividend of $1.20/share since the start of 2021, for a total payout of $2.20/share.
The company's additional $1.20/share dividend payout is based on a gold price of $1,800/oz, but gold has come under pressure this year, and front-month Comex gold closed Monday at $1,719/oz.
However, Bary notes Newmont's ( NEM ) strong balance sheet with $4B-plus in cash and ~$1.3B in net debt, which could help the company to continue paying a full $2.20 dividend even if earnings weaken.
"Newmont continues to be committed to providing sustainable shareholder returns while reviewing and approving our dividend quarterly with our board," the company told Barron's .
"The challenge for Newmont," Bary writes, "is that while investors may recognize that the current dividend is a mix of base and variable payouts, they seem to have gotten used to the entire package."
Newmont's ( NEM ) stock price return - without dividends - shows a 27% YTD drop and a 26% loss during the past year .
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Newmont faces dividend questions after Q2 earnings miss - Barron's