Newmont shares are about to trade ex-dividend. Time to buy?

Investors are running out of time if they want to snap up the latest Newmont dividend…

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ASX gold stocks have been some of the most sought-after investments on the Australian share market in 2024. Thanks to surging gold prices, investors have been chasing gold shares like Newmont Corporation (ASX: NEM) with a vengeance this year.

It's not hard to see why. Since the end of February, Newmont shares have rocketed a whopping 37% or so. The story is similar with other gold miners like Gold Road Resources Ltd (ASX: GOR), Silver Lake Resources Ltd (ASX: SLR) and Northern Star Resources Ltd (ASX: NST).

But next week, Newmont shares will be in the spotlight. That's because this ASX gold-mining giant is set to trade ex-dividend for its latest shareholder payment on Monday, 3 June.

Newmont's dividend payments work a little differently from those of most other ASX gold stocks — differently from most other ASX shares, in fact.

This is due to Newmont's status as an ASX CDI (CHESS Depository Interest). Newmont's ASX shares actually represent the company's primary listing on the US markets.

Newmont shares are about to pay out

Thanks to Newmont's acquisition of the former king of the ASX gold pack, Newcrest Mining, last year, ASX investors who owned Newcrest shares at the time were issued Newmont CDIs on the ASX. These CDIs aren't real ASX shares, but represent ownership of the company's primary stock, listed on the New York Stock Exchange as Newmont Corporation (NYSE: NEM) shares.

Owners of Newmont's ASX shares are still entitled to everything Newmont gives its shareholders, including dividend payments. But since Newmont is a US-based company, these dividends are a little different. For one, they no longer come with franking credits attached. They are also paid out quarterly rather than the six-month interval, which is the norm on the ASX.

The latest of these quarterly dividends is due to hit investors' bank accounts next month on 27 June. However, if anyone who wishes to receive this dividend who doesn't already own Newmont stock, time is running out.

Since the company will be trading ex-dividend for this upcoming payment on Monday next week, the last day you can buy Newmont shares with the right to receive the latest dividend attached is tomorrow, 31 May. Anyone who buys this stock from Monday onwards misses out this time.

The company's dividend will be worth 25 US cents per share (38 cents at current exchange rates). It will be the third dividend that Newmont's ASX investors will enjoy since the company joined the Australian markets.

This payment is between Newmont's December dividend of 42.6 cents per share and March's payment of 26.5 cents per share.

On an annualised basis, it would give Newmont shares a dividend yield of 2.43% at current pricing.

Time to buy?

You might think that today is a great day to buy Newmont shares, bag this dividend, and perhaps sell out later with some free money in your pocket.

Well, unfortunately, there's no free lunch here. When a company trades ex-dividend, its shares usually fall by whatever the value of the dividend that has just been lost was.

As such, you can either buy more expensive Newmont shares today with the dividend rights attached, or you can buy the cheaper shares next week that come without this dividend. You can't have the cake and eat it too, unfortunate as that may be.

So if you like Newmont as a business and a gold miner, by all means buy the shares today. But if you're chasing a quick buck, just hit up the casino instead.

Motley Fool contributor Sebastian Bowen has positions in Newmont. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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