Newmont Mining Corp (NEM): Is a Dividend Cut Reason to Sell This Mining Stock?

As a result, investors interested in mining stocks would be wise to consider companies with more diversified operations. Newmont and Goldcorp technically have operations in other metals, but the lion’s share of their sales and profits comes from gold.

That’s why I’d point investors to Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX), which has not been as severely punished as its competitors from the collapse in gold prices.

Freeport is obviously engaged in copper and gold, but also has significant oil and gas resources. This is due to the company’s $19 billion spending spree, acquiring both Plains Exploration and McMoRan Exploration in recent months.

The company’s earnings held up relatively well considering the beating most miners have taken recently. Net income per share declined 25% over the first six months of 2013 as opposed to the same period in 2012. That’s certainly disappointing, but not at all unexpected and not as bad as its competitors.

Moreover, Freeport’s dividend is holding steady, which provides strong downside protection for wary investors. Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX)’s declining share price has pushed its yield to 4.5% annualized, which means investors are being paid handsomely to wait for a rebound.

The fact that Freeport’s dividend is holding up is a great sign that management sees light at the end of the tunnel. Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX)’s mineral operations are more evenly split between gold and copper. In addition, the company’s acquisitions mean this is a diversified business and an impending natural resource powerhouse. For Foolish investors interested in mining stocks, Freeport should be where your research begins.

The article Is a Dividend Cut Reason to Sell This Mining Stock? originally appeared on Fool.com and is written by Robert Ciura.

Robert Ciura has no position in any stocks mentioned. The Motley Fool owns shares of Freeport-McMoRan Copper & Gold. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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