Kuta Beach

Kuta Beach

Thursday, 22 January 2009

Global Mining Investments Ltd Yields 13.2%

I was browsing through Commsec and realized that the listed investment company Global Mining Investments Limited (ASX:GMI) has a dividend yield of 13.2 per cent. This seems incredibly high and makes me wonder whether mining and energy stocks are good value now that commodity prices are down. If emerging economies like China and India pick up again in the future, we will certainly see demand for raw materials needed to build infrastructure.

Good value in GMI relies on dividends remaining high. In the current environment, that is not certain. Maybe within the next few months we will see many companies starting to lower their dividends.

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