Southern Peru Copper Pays Highly Variable Dividends

The current 9.49% dividend yield ($6.37/$67.11) for Southern Peru Copper (PCU) makes the stock seem like a dream for the dividend investor. Yet, closer inspection reveals that the quarterly dividend is highly variable; thus annual dividends are quite variable. As copper prices have moved to record highs, dividends have risen accordingly. But when cooper prices fall, PCU dividend cuts are likely to follow.

So if you want to buy PCU just because it pays a large dollar dividend, think again.