Shares in gold miner Regis Resources Limited (ASX: RRL) have sparkled in June as the share price improved 16% to a 2017 high of $3.85 from a low of $3.14 in late May.
Interestingly, Regis’ spectacular month came at a time when shares in rival gold miners stagnated or fell, indicating that there must be more to its performance than a move in the gold price!
What’s happening at Regis Resources Limited?
In the month of June, Regis released two major pieces of information; on the 6th, Regis released the first information about its estimate of gold held at its Tooheys Well mine, within its wholly owned Duketon Gold project in Western Australia.
Regis announced an estimate of 366,000 ounces to gold and mining is expected to commence in the March 2018 quarter at a rate of 90,000 ounces per annum.
A good sign!
The second piece of news was an investor presentation summarising pretty much everything we already knew about the company’s 3rd quarter results:
- Q3 gold production 79,223 ounces
- Q3 grade of 1.17g/t: 8% higher than Q2
- Q3 operating cashflow $57.8m (Q2: $64.5m)
- On track to increase dividend above 14 cps for the full year
Where to from here?
Analysts are expecting earnings per share for the 2017 financial year of 24 cents and 14.5 cents of dividend per share. This puts the company on a price to earnings ratio of 16 and dividend yield of around 3.7% fully franked (5.2% grossed up), about on par with the market as a whole, but probably more expensive than a small gold miner would be.
At a market cap of 1.9b, Regis has returned investors 250% since mid-2015; more than 5 times larger than its peers Newcrest Mining Limited (ASX: NCM) and OceanaGold Corporation (ASX: OGC), however the ride has been rough on the hairline of long-term investors!
Now may be the time to take some gains off the table and move into big-dividend companies with a more stable growth profile with a yield nearly 50% above that of Regis!
This company’s dividend is almost the stuff of legends. Since it started paying dividends in 2007, it has increased its payout to shareholders every single year, a run that includes 21 consecutive dividend increases.
Based on the last 12-months of dividends, its shares are currently offering a fully-franked 4.8% yield, which grosses up to almost 7% when those franking credits are included.
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Motley Fool contributor Andrew Mudie has no position in any stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. 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. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.