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Gold stocks aren't known for their dividends, but there are a handful that have decent yields right now. AngloGold Ashanti (NYSE: AU) currently sports a 3.8% yield based on the last four quarters' dividends and a sparkling 7% yield based on the most recent dividend. Will shareholders continue to shout "Eureka!" each quarter as their dividend check comes in, or is the dividend closer to fool's gold? AngloGold Ashanti has mining projects in 10 countries, including Guinea, Argentina, and the United States. The projects in the U.S. are based in southern Nevada and are expected to produce a combined 600,000 ounces of gold annually. In 2025, AngloGold Ashanti produced more than 3 million ounces of gold and 3.7 million ounces of silver. It has 36.5 million ounces of gold still in the ground on its properties. With gold prices up sharply over the past few years, it's not surprising that the company's free cash flow is booming and is projected to continue to rise. Last year, free cash flow rose to over $3.4 billion from $985 million in 2024. This year, free cash flow is forecast to be $5.2 billion, climbing to $6.7 billion in 2027. The gold miner paid shareholders $1.9 billion in dividends in 2025 for a 55% payout ratio. This year's $2.9 billion in expected dividends would maintain that 55% figure. That's a good level. I like to see companies paying out 75% or less of their free cash flow in dividends. That way, if free cash flow slips, the company may still be able to afford its current dividend. The 75% threshold gives it a buffer zone - some margin for error. However, when it comes to dividend safety, AngloGold Ashanti has a big problem. Its dividend is variable. That means it's going to be different every quarter. |
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