The Prettiest Dividend in the World

With two-year U.S. Treasury bonds offering a meaningless yield of 0.35%, it's no wonder that investors are clamoring for attractive dividends to help keep their income streams flowing.

Mortgage REIT Annaly Capital (NYSE: NLY  ) seems a popular choice with investors, given its current 14.1% yield, but my own personal aversion to leverage forces me to steer clear. I enjoyed a nice ride -- albeit it a bumpy one -- with Penn West Energy that began amidst the carnage of the infamous Halloween massacre of 2006; but after locking in those gains last year, I set out to find the next target for my income allocation.

And then, like clockwork, the broadly increasing dividend yields from gold and silver miners that I had urged investors to watch for began to take shape in earnest. Even with its relatively elevated cost structure, major producer Gold Fields now yields more than 3%! By linking their payouts to the prevailing price of their primary products, Newmont Mining (NYSE: NEM  ) and Hecla Mining (NYSE: HL  ) offer added enticement for income investors sharing my expectation for continued long-term gains in the monetary metals. Meanwhile, for Fools who are cognizant of Eldorado Gold's (NYSE: EGO  ) remarkable production growth profile, this mid-tier marvel will shine with a dividend policy that's tied to both production volume and the average gold price.

Although Eldorado's innovative dividend policy shines, the dividends that will soon be available from Gold Resource (AMEX: GORO  ) will quite literally glitter. That's because Gold Resource this week became the first company to announce its participation in a new physical gold and silver bullion dividend program offered through Gold Bullion International. Itself a noteworthy leader in the industry's growing emphasis upon returning cash to shareholders, Gold Resource (often referred to by its ticker symbol, GORO) strikes me as a fitting pioneer for this new program. GORO has already doled out $41 million in cash to shareholders -- through 20 consecutive monthly dividends -- since the miner declared commercial production at its El Aquila mine in southern Mexico in July 2010. Employing the slogan "Earnings are opinion; cash is fact," GORO targets long-term dividend distribution at roughly one-third of cash flow.

So while you may think that Annaly Capital offers a stunning dividend with its current 14% yield, I think we can all agree that the forthcoming dividends from Gold Resource are simply the prettiest in the world. Have a look for yourself! The following images show either side of the gold and silver bullion coins that will be available through this new program.

If you know of a prettier dividend out there, I'm all ears.

 

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Fool contributor Christopher Barker can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He Tweets. He owns shares of Eldorado Gold and Hecla Mining.

The Motley Fool owns shares of Annaly Capital Management. Motley Fool newsletter services have recommended buying shares of Annaly Capital Management. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 13, 2012, at 7:35 PM, rfaramir wrote:

    So, to be clear, this dividend "will quite literally glitter" because it will be (or can be) paid in physical gold or silver bullion?

    If so, that is so cool! By being "offered through Gold Bullion International", does this mean that fractional quantities of gold and silver can be 'mine' and kept in their hands for me?

    The downside being, it's really paper gold and silver, since it's not in my hot little hands.

    The upside being, it's real gold and silver in a trustee's hands, until I request physical delivery.

  • Report this Comment On March 13, 2012, at 8:50 PM, XMFSinchiruna wrote:

    rfaramir,

    http://www.goldresourcecorp.com/gold-silver-dividends.php

    "Gold Resource Corporation (GRC) shareholders have the option to receive gold and silver dividends by converting their cash dividend into physical gold and / or silver providing direct exposure to physical precious metals. Upon execution and conversion from cash into physical, the shareholder has the option to take delivery of their physical precious metals, direct their physical into a Gold Bullion International approved vault or direct the metals into a vault of their choosing."

    https://grc.bullioninternational.com/

    "On the 10th of every month, or the first business day thereafter (the “Record Date”),

    your dividend will be determined and allocated to your Bullion Account."

    "On the 23rd of every month, or the first business day thereafter (the “Payment Date”)

    based on your investment instructions, cash dividends are automatically converted into physical gold and silver

    on your behalf."

    "You can access the online platform any time to review the status of your Bullion Account,

    review your conversion options, sell or deliver your holdings. A statement is issued

    monthly providing you a convenient overview of your Bullion Account."

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