- Dividend is a profit share that the investors get for the investment they have made in a company.
- Well-established companies provide consistent dividends to their shareholders, and it is considered as an indication of a company's financial health.
- A fully franked stock with a good yield lures retail investors as it offers guaranteed income with no tax liability on the dividends.
The dividend yield is a financial ratio that represents the financial health of a company. It calculated by dividing the dividend paid per by the price per share. Certain companies pay dividends to their investors each year. Generally speaking, investment in stocks can yield returns from two sources – one is an increase in the market price of the share or capital gain, and the other is dividend payouts. Dividend yield is a good indicator of a company's performance and value. At its most basic level, dividends are a form of profit-sharing for the investment made by shareholders in the business.
Also Read: Top 10 ASX-listed dividend stocks for July
What is Franked dividend?
Since the companies pay dividends to the shareholders out of the profits earned, that means dividends have already been subject to tax at the corporate level. So, a shareholder receiving the dividend should not be obliged for the tax on that dividend when it comes to paying individual income tax.
Franked dividends are like icing on the cake; they provide tax relief for the investors. Franked dividends come with a tax credit attached, to eliminate the issue of double taxation of dividends for investors. Thus, it reduces the tax burden on investors.
Franked dividends are primarily of two types – the fully franked dividends and the others that are partially franked. If the dividend is fully franked, it is implied that the company has paid tax on the entire dividend amount and dividends that are not fully franked may lead to tax payments by investors.
Various companies, including ASX-listed gold miners, have made huge profits in 2020-21 due to the high demand for gold as a safe-haven investment and hedge against inflation. As a result, the gold prices had a good runup even it crossed the US$2,050 per ounce mark in August 2020. However, the yellow metal is trading below the US$1,800 per ounce level since mid-June after hitting five-month highs on 2 June 2021 amid strengthening of the US dollar and rebound in the global economy with US Federal sped up the expected pace of policy tightening.
Must Read: Which ASX companies paid dividends today?
In the backdrop of this, let us skim through ten fully-franked gold stocks with highest dividend yield.
Fortescue Metals Group Limited
Fortescue Metals Group Limited (ASX:FMG) is the world's fourth-largest iron ore producer. The company is engaged in multi-commodities such as iron ore, copper, and gold. The Company is focusing on the early-stage target generation for copper-gold in Western Australia regions, with exploration activity underway in South Australia and NSW. The company also holds 450,000 hectares of tenements in Argentina, prospective for copper and gold.
The miner paid an interim dividend of AU$1.470 on 24 March 2021.
Rio Tinto Limited
Rio Tinto Limited (ASX:RIO) is an Anglo-Australian multinational company with operations in more than 35 countries. It is the world's second-largest metals and mining company. Rio's primary business includes the production of iron ore, copper and aluminium. However, the miner is also engaged in the production of gold.
In 2020, the company produced 182koz of gold from Oyu Tolgoi operations. Oyu Tolgoi is one of the largest known copper and gold deposits in the world.
Rio paid a final dividend of AU$5.171 on 15 April 2021.
Regis Resources Limited
Regis Resources Limited (ASX:RRL) is Australia’s leading mid-tier gold company. It operates in two distinct project areas in the Central Western region of New South Wales and in the North-Eastern Goldfields of Western Australia.
RRL paid an interim dividend of AU$0.040 paid on 25 March 2021.
St Barbara Limited
St Barbara Limited (ASX:SBM) is an Australia-based ASX 200 company with gold mining operations in Canada, Australia and Papua New Guinea. The company holds nearly 12 million ounces of mineral resources, including 6Moz of contained gold, as of 30 June 2020.
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The miner distributed an interim dividend of AU$0.040 on 24 March 2021.
Evolution Mining Limited
Evolution Mining Limited (ASX:EVN) is an Australia based gold miner. The company holds four and one, fully-owned mines in Australia and Canada, respectively. Additionally, the miner also holds significant interests in Ernest Henry copper-gold mine in Queensland.
EVN paid an interim dividend of AU$3.51 to its shareholders on 26 March 2021.
Mineral Resources Limited
Mineral Resources Limited (ASX:MIN) is an Australia based metals and mining company that is focused on the exploration and production of gold, copper, tin, tungsten, lead, and zinc ores. It is one of the leading and innovative mining companies with world-class portfolio of mining operations across multiple commodities.
MIN paid an interim dividend of AU$1.0 to its shareholders on 9 March 2021.
Northern Star Resources Limited
Northern Star Resources Limited (ASX:NST) is a global-scale Australian gold producer with world-class projects located in the highly prospective regions of North America and Australia. The miner holds a portfolio of low cost and high-grade underground mines. The miner holds 385,794,000 tonnes of total reserves with a grade of 1.7gpt and contained gold of 20,992 koz.
NST paid an interim dividend of AU$0.095 to shareholders on 30 March 2021.
Ramelius Resources Limited
Ramelius Resources Limited (ASX:RMS) is a Western Australia focused gold producing company. RMS is engaged in the exploration, development and mining of gold. The company currently operates the Mt Magnet, Vivien, Edna May and Marda gold mines in Western Australia.
Source: Copyright © 2021 Kalkine Media
The gold miner paid a final dividend of AU$0.020 to its shareholders on 2 October 2020.
OZ Minerals Limited
OZ Minerals Limited (ASX:OZL) is an Australia based metals and mining company. It holds and operates the Prominent Hill copper-gold mine and the Carrapateena copper-gold project located in South Australia.
The miner paid a final dividend of AU$0.170 on 26 March 2021.
South32 Limited (ASX:S32) is a diversified metals and mining company that is engaged in the production of various commodities in Australia, Southern Africa and South America. The miner has made various strategic alliances to explore opportunities targeting gold.
The miner paid an interim dividend of AU$0.018 to its shareholders on 8 April 2021.