U.S. Global Investors Announces Continuation of Monthly Dividends with Total Shareholder Yield Topping 9%, Offers an Update on Airlines and Gold
San Antonio, TX, Dec. 17, 2024 (GLOBE NEWSWIRE) -- U.S. Global Investors, Inc. (NASDAQ: GROW), a registered investment advisory firm[1] with expertise in gold mining stocks and the airline industry, is pleased to announce that it will continue its payment of monthly dividends.
The Company's Board of Directors (the "Board") approved payment of the $0.0075 per share per month dividend beginning in January 2025 and continuing through March 2025. The record dates are January 13, February 10 and March 17, and the payment dates will be January 27, February 24 and March 31.
At the December 13, closing price of $2.44, the $0.0075 monthly dividend equals a 3.69% yield on an annualized basis. In addition, the Company's shareholder yield was 9.34% as of September 30, 2024.[2] This strong yield reflects the Board's commitment to delivering value to shareholders through a combination of monthly dividends and share repurchases.
Airline Stocks Soar on Record-Breaking Holiday Travel
Airline stocks have shown strong momentum over the past three months, fueled by the holiday travel surge. On Sunday, December 1, the Transportation Security Administration (TSA) reported a record 3.08 million passengers—the highest single-day total ever.[3] United Airlines, one of the top holdings in our airlines ETF, has rallied approximately 130% year-to-date through December 13, making it the best performing airline stock of 2024.
In addition, the domestic airlines group has emerged as the top-performing sector in the Industrials category for the three-month period. This surge comes as carriers report robust passenger demand and provide optimistic guidance.
"The media has been notably negative on the airline industry, especially since Spirit Airlines filed for bankruptcy in November," says Frank Holmes, Company CEO and Chief Investment Officer. "Sadly, many who followed these reports may have overlooked opportunities with high-flying carriers like United. It's always important for investors to conduct their own due diligence."
2025 Airlines Industry Outlook
Looking ahead to 2025, U.S. Global Investors sees a promising year for the global airline industry. The International Air Transport Association (IATA) projects total industry revenues to surpass $1 trillion for the first time, reaching $1.007 trillion, a 4.4% increase from 2024. Passenger numbers are forecast to soar to 5.2 billion, marking another milestone in the industry's post-pandemic recovery.[4]
Morgan Stanley anticipates a "perfect storm of tailwinds" for U.S. airline stocks in 2025, driven by strong demand, disciplined capacity management and favorable fuel costs. This combination is expected to support margin expansion, with revenue per available seat mile (RASM) outpacing costs.[5]
Adding to the sector's momentum, Alaska Air Group has announced robust earnings guidance for 2025 and a $1 billion share repurchase program, signaling confidence in its long-term growth.[6] Meanwhile, major carriers like American Airlines[7] and Southwest Airlines[8] have revised their profit expectations upward, citing strong holiday demand, record passenger numbers and lower jet fuel prices.
"The airline industry has shown remarkable resilience, and we believe 2025 is shaping up to be a milestone year. With revenues expected to hit $1 trillion and passenger numbers soaring past 5 billion, we're witnessing a powerful recovery driven by disciplined management and historic travel demand. This creates what we see as an attractive opportunity for investors seeking exposure to the sector's growth," says Mr. Holmes.
Gold Achieves New All-Time High, Driven by the Fear and Love Trade
Gold recently achieved a new record high price, surpassing $2,800 an ounce at the end of October. The Company believes this rally has been supported by mounting global government debt and expectations of falling interest rates. With U.S. interest payments on public debt now topping $1 trillion a year,[9] the Company believes owning gold remains a prudent strategy for investors seeking an alternative asset—especially gold mining stocks with strong free cash flow yields.
"The ongoing surge in global debt has amplified gold's Fear Trade, which I define as a hedge against monetary instability and government overspending," comments Mr. Holmes. "Gold is also driven by what I call the ‘Love Trade,' particularly in India—the world's most populous country, where gold has deep cultural significance as gifts."[10]
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About U.S. Global Investors, Inc.
The story of U.S. Global Investors goes back more than 50 years when it began as an investment club. Today, U.S. Global Investors, Inc. (www.usfunds.com) is a registered investment adviser that focuses on niche markets around the world. Headquartered in San Antonio, Texas, the Company provides investment advisory and other services to U.S. Global Investors Funds and U.S. Global ETFs.
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Past performance does not guarantee future results.
This news release may include certain "forward-looking statements" including statements relating to revenues, expenses, and expectations regarding market conditions. These statements involve certain risks and uncertainties. There can be no assurance that such statements will prove accurate and actual results and future events could differ materially from those anticipated in such statements.
The continuation of future cash dividends will be determined by U.S. Global Investors's Board of Directors, at its sole discretion, after review of the Company's financial performance and other factors, and is dependent on earnings, operations, capital requirements, general financial condition of the Company and general business conditions.
Shareholder yield is a financial metric that measures the total return a company provides to its shareholders through dividends, share repurchases (buybacks), and debt reduction. It reflects how much cash a company is returning to investors relative to its market value. Revenue per Available Seat Mile (RASM) is a key financial metric used in the airline industry to measure an airline's operating revenue efficiency. It represents the amount of revenue generated per seat offered for every mile flown.
The S&P 500 Passenger Airlines Index, S&P 500 Construction & Engineering Index, S&P 500 Electrical Equipment Index, S&P 500 Trading Companies & Distributors Index, S&P 500 Machinery Index and S&P 500 Industrials Index are all capitalization-weighted indices.
Holdings may change daily. Holdings are reported as of the most recent quarter-end. The following securities mentioned in the article were held by one or more accounts managed by U.S. Global Investors as of 9/30/2024: Alaska Air Group Inc., American Airlines Group Inc., Southwest Airlines Co., United Airlines Holdings Inc.
[1] Registration does not imply a certain level of skill or training.
[2] The Company calculates shareholder yield by adding the percentage of change in shares outstanding to the dividend yield for the 12 months ending September 30, 2024. The Company did not have debt; therefore, no debt reduction was included.
[3]Shepardson, D. (2024, December 2). US screened record 3.08 million airline passengers on Sunday, agency says. Reuters. https://www.reuters.com/world/us/us-screened-record-308-million-airline-passengers-sunday-agency-says-2024-12-02/
[4] International Air Transport Association. (2024, December 10). Strengthened profitability expected in 2025 even as supply chain issues persist. International Air Transport Association. https://www.iata.org/en/pressroom/2024-releases/2024-12-10-01/
[5] Thakur, P. (2024, December 11). Morgan Stanley sees airline stocks propelled by demand, favourable fuel cost. Investing.com. https://www.investing.com/news/stock-market-news/morgan-stanley-sees-airline-stocks-propelled-by-demand-favourable-fuel-cost-3766443
[6] Tatananni, M. (2024, December 10). Alaska Air stock flies high on strong guidance and $1 billion share buyback program. Barron's. https://www.barrons.com/amp/articles/alaska-air-stock-earnings-guidance-buybacks-927afce1
[7] Schlangenstein, M. (2024, December 5). American Air jumps on stronger profit, holiday demand view. Bloomberg. https://www.bloomberg.com/news/articles/2024-12-05/american-airlines-boosts-profit-outlook-heading-into-holidays?sref=1pPyLRr7
[8] Seal, D. (2024, December 5). Southwest Airlines lifts revenue outlook on resilient travel demand. The Wall Street Journal. https://www.wsj.com/business/earnings/southwest-airlines-lifts-revenue-outlook-on-resilient-travel-demand-75ac8b67
[9] Cox, J. (2024, September 12). Interest payments on the national debt top $1 trillion as deficit swells. CNBC. https://www.cnbc.com/2024/09/12/interest-payments-on-the-national-debt-top-1-trillion-as-deficit-swells.html
[10] Somani, D. (2023, July 30). India's enduring affair with gold jewellery: A timeless love story. The Times of India. https://timesofindia.indiatimes.com/blogs/voices/indias-enduring-affair-with-gold-jewellery-a-timeless-love-story/
Attachments
- United Airlines Is the Best Performing Airline Stock of 2024
- Airlines Are the Best Performing Industrials Sector for the Three-Month Period
Holly Schoenfeldt U.S. Global Investors, Inc. 210.308.1268 [email protected]