This has been a brutal year for corporate America. The economic downturn has caused most companies to cut their dividends down to ZERO, because most are seeing their revenue and earnings shrink. Some are on the verge of bankruptcy. This week Ruby Tuesday went under declaring chapter 11 and now airlines are betting for more stimulus money to just stay alive. They are now zombie companies.
But this week one company boosted it’s dividend by a whopping 50% to $0.105 a share. It’s Yamana Gold (NYSEARCA: AUY) and it put out this news before the open yesterday that helped generated a 6.50% increase in share price. More Federal government money printing is also hurting the US dollar index and setting up a golden triangle trading pattern for gold.
This is a victory for Yamana Gold shareholders. The company also boosted its production guidance for 2020. “All our operations are back to their normal run rate and we are currently tracking ahead of our plans, and therefore are evaluating an increase in our production guidance,” Gerardo Fernández, senior VP, corporate development, told the TSX Latam Mining Investor Day online event.
I own this stock, but what is important is that it is a mining stock. You see while most sectors are still having earnings and revenue issues inside the mining sector you are seeing major companies capable of boosting dividends, because higher gold and silver prices are enabling them to do so. The sector provides earnings growth. As earnings grow the stocks go up and the dividends increase.
AUY shares are in a simple consolidation triangle pattern with resistance now at $6.00. I expect it to jump when it breaks it, but my top stock pick for this month actually has more upside potential from a similar consolidation pattern. That’s Silver Dollar Resources (OTCMKTS: SLVDF).
I own this stock and it is consolidating now in a range with $1.90 as resistance. It closed right on its upper 20-day Bollinger Band yesterday. The news on AUY is more reason why I am so focused on mining and exploration stocks now. For my full details on Silver Dollar Resources go to my first post on it here.
-Mike
Disclosure: Mike Swanson owns shares of Silver Dollar Resources, Inc. Because it is a small cap stock with a market cap of less than $100 million he has put himself on a trading blackout on it and will not buy or sell a share of it for at least 30-days from the date of this post. Wallstreetwindow.com, is owned by Timingwallstreet, Inc., which is being compensated by a third party (Leadgopher LLC DBA Pinnacle Ad Network) to conduct an investor awareness advertising and marketing campaign for Silver Dollar Resources, Inc. This third party paid Timingwallstreet Inc., $23,000 to produce and disseminate this and other similar articles and send traffic to them through paid advertising online campaigns for 30 days beginning October 1, 2020. This compensation should be viewed as a major conflict with our ability to be unbiased, more specifically: This communication is for entertainment purposes only. Never invest purely based on our communication. For more on trading risks read our policy statement by clicking here.
