According to Reuters the biggest commodities trader and miner on the planet Glencore will pay a dividend of $ 1 billion starting new year or in a couple of days. This is good news going into 2017 for it says Glencore has sold assets and more importantly commodity prices have risen due to demand. Glencore still has plenty of debt $17 billion, it assets sales will be in the $ 6 billion range, but commodity prices have risen. The commodity’s Glencore is involved with include copper, zinc, nickel and coal. The good news for Glencore is prices have risen but not enough for more supply to come onto the market. Glencore had announced forward coal sales for 2016 and 2017 of 55 million tonnes or about half of its annual production. If it had could have waited, the same forwards coal sales would be at $400 million more. (even companies have could of, should have moments.)

Glencore will pay $ billion in 2017 in dividends and afterwards start with $ 1 billion and add 25% of free cash flow from mining which could add another $ 1 billion depending on the performance and commodity prices.

Linking to dividend paying stocks, when the commodity cycle for any company gets on the downturn, that is when your research has to kick in. The research is not to buy the companies, but determine as the commodity cycle changes know which companies to buy. At that point in time your risk reward is the lowest for risk and highest for reward and you can buy low and sell high. It takes willingness to understand the commodity price changes, the markets and patience to choose the best of the breed stocks. Ideally if you can also purchase a stock which can and will pay a dividend in helps to limit downside risk.

There are more questions than answers, till the next time – to raising questions.