Southern Copper Corp. : SCCO-US: Dividend Analysis : May 17th, 2017 (record date) : By the numbers : May 19, 2017

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Our analysis is based on comparing Southern Copper Corp. with the following peers – Freeport-McMoRan, Inc., Grupo Mexico S.A.B. de C.V. Class B, Lundin Mining Corporation, Teck Resources Limited Class B, Sociedad Minera Cerro Verde SAA, First Quantum Minerals Ltd., BHP Billiton Limited Sponsored ADR, Rio Tinto plc Sponsored ADR, BHP Billiton Plc Sponsored ADR and Compania de Minas Buenaventura SAA (FCX-US, GMBXF-US, LUNMF-US, TECK-US, CVERDEC1-PE, FM-CA, BHP-US, RIO-US, BBL-US and BUENAVC1-PE).

Southern Copper Corp.’s dividend yield is 0.89 percent and its dividend payout is 19.49 percent. This compares to a peer median dividend yield of 0.80 percent and a payout level of 1.36 percent. This type of dividend performance might make it a good stock for dividend investors. In addition, the company’s relatively good dividend quality score of 83 out of a possible score of 100 points to some sustainability of its robust payout ratio, and underscores its attractiveness for dividend investors seeking current income.

Dividend Yield
Dividend Quality Score

Dividend Quality Overview

  • Over the last twelve months (prior to March 31, 2017), SCCO-US paid a high quality dividend, which represents a yield of 0.68% at the current price.
  • Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 1 was high quality, 2 were medium quality and 2 were low quality.
  • The ending cash balance, with a dividend coverage of 4.22x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
Dividend Quality Score Vs Dividend Yield

Quadrant label definitions. Hover to know more

High Score;High Yield, High Score;Low Yield, Low Score;Low Yield, Low Score;High Yield

Dividend Coverage

Over the last twelve months (prior to March 31, 2017), SCCO-US paid a high quality dividend.

The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 7.58x), investing cash flow (coverage of -4.48x), issuance cash flow (coverage of -0.10x) and twelve-month prior cash (coverage of 3.73x), for a total dividend coverage of 5.22x.

SCCO-US‘s issuance cash flow includes outflows from net share buybacks (coverage of -0.10x). Thus, the total coverage including share buybacks is 5.32x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.

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These coverage ratio factors imply that the firm’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high dividend quality.

Dividend History

Item 2012-12-31 2013-12-31 2014-12-31 2015-12-31 2016-12-31 Latest
Dividend Yield (%) 9.81 2.39 1.66 1.34 0.56 0.89
Dividend Payout (%) 162.72 35.42 28.57 36.56 18 19.49

A complete list of metrics and analysis is available on the company page.

Company Profile

Southern Copper Corp. engages in the development and exploration of mineral properties. It operates through the segments: Mexican Open-Pit; Mexican IMMSA Unit; Peruvian Operations; and Corporate and Other. The Mexican Open-Pit segment manages mines and processes anodes and copper. The Mexican IMMSA Unit segment operates underground coal mines. The Peruvian Operations segment includes open-pit mines in Peru. The Corporate and Other segment consists of the firm’s administrative activities. The company was founded on December 12, 1952 and is headquartered in Phoenix, AZ.


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