Today I purchased 65 shares of Goldcorp Inc (TSE: G) at $22.60, for a total investment of $1,469.00. I’ve been watching Goldcorp ever since I started investing a month and a half ago and the price has dropped a decent bit; enough for me to initiate a position in it as the yield went up to 3.18% at the time I purchased. Another reason I purchased my shares today is because the ex-dividend date is tomorrow, May 12th.
For those who may not know much about investing, the ex-dividend date is the day on which you must own shares of a company to receive the dividend paid. You must purchase the shares the day before the ex-dividend date to be recorded as a shareholder, and you will receive your dividends on the payment date in your brokerage account.
Goldcorp pays US$0.05 (CAD$0.06) per share in dividends monthly. I was itching for another monthly dividend stock and as I’ve been watching Goldcorp for a little while, I thought it was time to jump in. The stock has a 52-week high of $32.32, and a 52-week low of $19.18. The fact that the price is so close to the 52-week low and far from the 52-week high is a good thing; meaning the stock has a large amount of space for growth. Goldcorp will add $3.90 to my monthly dividends, which adds up to $46.8 per year.
Thomson Reuters has a 12-month expected mean value of $25.50 per share, which would amount to a 36.1% increase over the current price; and currently advertises a Buy rating on the stock. Goldcorp also has a forecasted EPS growth of 31.5% for 2015, and 39.2% for 2016.
Considering gold is a hedge on inflation, the stock should hold up pretty well when interest rates do rise. I’d prefer holding a gold mining stock rather than simply gold; especially for the dividends which have a decent yield.
The 5-year yield average is 1.18%, meaning Goldcorp is currently extremely undervalued as it has a 3.18% dividend yield. Since the price of the stock has dropped so much, while the dividend payments have remained the same the yield is expressed as a higher value since you are getting more for paying less. Goldcorp also boasts a 27.23% 5-year yield growth rate, which is absolutely great. Although it has remained constant in the past couple years, they have not dropped their dividends – which I’m happy enough with.
This was my first purchase in my non-registered account. There’s a fee on this account if I don’t have $10,000 in it by September so I’m cracking down on this and giving the TFSA an unfortunate break (They raised the TFSA limit only after I opened the account!).
Anyways, that’s a wrap; happy dividend investing everyone!