Anglogold Ashanti's Dividend Policy and Gold Market Prospects: A Buy or Not?

Anglogold Ashanti (AU) has more than doubled in 2025, outperforming its gold mining peers and the VanEck Gold Miners ETF (GDX). The company's fortunes are tied to gold prices, which are in a structural bull market due to ongoing geopolitical turmoil. AU's attractive dividend policy and strong returns make it a buy despite its recent performance.

AngloGold Ashanti (AU) has experienced a remarkable year-to-date (YTD) performance, appreciating by 104% since the beginning of 2025. This impressive rise has significantly outperformed the Zacks Mining – Gold industry’s 53% gain, the Basic Materials sector’s 13.7% increase, and the S&P 500’s 5.9% gain in the same period [1]. The AU stock closed at $47.11 yesterday, just 8.5% shy of its 52-week high of $51.11 achieved on June 13, 2025.

Several factors have contributed to AU’s robust performance. The most notable is the surge in gold prices, which have reached around $3,370 per ounce, driven by geopolitical tensions and President Donald Trump’s announcement of new tariffs on Europe and Mexico [1]. Gold prices are expected to continue gaining momentum due to central bank purchases, interest rate cuts, and geopolitical uncertainties.

AngloGold Ashanti’s strong financial and operational results in the first quarter of 2025 have also bolstered its stock price. The company reported a 529% year-over-year increase in earnings per share to 88 cents, driven by higher gold production, disciplined cost control, and increased gold prices [1]. Gold production increased by 22% year-over-year to 720,000 ounces, marking its strongest first-quarter performance since 2020.

The company’s strategic growth focus, including the acquisition of Egyptian gold producer Centamin and the proposed joint venture with Gold Fields, has positioned AU for continued growth. The acquisition of Augusta Gold for C$152m ($111m) will further expand its presence in the Beatty district of Nevada, enhancing its mineral resource inventory [2]. The deal is expected to close in the fourth quarter of 2025, pending shareholder approval.

AngloGold Ashanti’s attractive valuation, with a forward 12-month earnings multiple of 9.51X, and upward earnings estimate revisions make it an appealing investment. The Zacks Consensus Estimate for 2025 sales is $8.85 billion, indicating 52.8% year-over-year growth, and the consensus mark for earnings is $4.99 per share, suggesting a 125.8% year-over-year upsurge [1]. The average price target on AU suggests a 1.72% upside from its last closing price of $47.11.

Despite its recent performance, investors should consider AU’s attractive dividend policy and strong returns. Its Zacks Rank #1 (Strong Buy) further supports its potential for continued growth. However, it is essential to assess the company’s growth prospects and risks before making a decision to add AU to your portfolio.

References:
[1] https://finance.yahoo.com/news/anglogold-ashanti-skyrockets-104-ytd-161300817.html
[2] https://finance.yahoo.com/news/anglogold-ashanti-acquire-augusta-gold-153504274.html