Southern Peru Copper (PCU)

Southern Peru Copper, at first glance, has a whopper of a dividend! When I see a dividend that large I immediately wonder if it is sustainable.

Southern Peru Copper (PCU) is based in Phoenix, AZ and is engaged in the mining of Copper, Molybdenum, Zinc, Silver, Gold, and Lead. Operating mines in Peru and Mexico, the company has benefitted from the recent increase in metals and materials commodity prices. Let’s have a closer look…shall we?

Not only did it close up 2.66% today at $49.02 USD, it has a P/E Ratio of 8.74.
EPS: $5.61
PEG: 0.66
ROA: 28.96%
ROE: 53.57%
Quarterly Earnings Growth: 40.8%
Debt/Equity: 0.483
Dividend Rate: $4.60
Dividend Yield: $4.60/$40.92 = 9.3%

Those of us investing for a little further into the future will be concerned with the history of dividends and the potential growth of the dividend income over time. Taking a look at the historical dividends for Southern Peru Copper (PCU), we find that the overall dividends have been increasing with erratic payouts from quarter to quarter. The dividend rate has increased over the last three years with $1.196 paid in 2004, $3.18 in 2005, and over the first three quarters of 2006 $3.75 has been paid with another dividend expected in the fourth quarter.

What are your thoughts on the fundamentals? Please leave a comment or contact me with your opinions. Nothing too terrible jumped out at me from the financial statements, but I sometimes miss things when I get excited about a stock.

We’ll have a look at the technical side of things in another post to see if any chart patterns are forming.

Have a profitable day!

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