Ebube Jones
5 min read
Gold hit fresh record highs in 2025, and that has made it a lot more relevant for income investors. According to Statista, gold prices rallied by more than 50% through October 2025, which is the strongest annual gain since 1979, as the metal pushed past $4,000 per troy ounce with ongoing geopolitical uncertainty and continued monetary easing by the U.S. Federal Reserve. Forecasts for 2026 still point to gold averaging above $4,000 per ounce, and some analysts think it could get close to $5,000 at some point during the year.
As spot prices moved up, gold mining stocks generally followed, and that has opened a window where investors may be able to get both price gains and dividend income from profitable producers. Caledonia Mining Corporation (CMCL) is one of the names that fits that description.
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It is a Zimbabwe-focused gold miner with a forward annual dividend of $0.56 per share and a 2.11% yield, and it also ranks as a top-rated pick on Barchart’s dividend stock screen, sitting in a part of the gold space where companies are posting positive earnings while still returning cash to shareholders.
But can a small-cap miner with a single analyst rating and a relatively modest yield truly deserve top billing in a dividend-focused portfolio for February 2026? Let’s find out.
Caledonia Mining is a smaller gold producer that mainly runs on its long-life Blanket Mine in Zimbabwe, and it uses the steady production from that mine to support both dividends and its next stage of growth.
The stock has been a standout in performance, up about 187% over the past 52 weeks, and it is also up around 11% year-to-date (YTD) in the early part of 2026.
The valuation still looks reasonable, with CMCL trading at about 8.5x forward earnings compared with roughly 18.55x for the wider materials sector.
On the dividend side, the story is also pretty straightforward. Caledonia has a forward payout ratio of about 18.72%; it pays dividends quarterly, and it has now raised the dividend for one year in a row. The stock’s 2.11% yield is not far from the materials sector’s 2.82% average, and it sits on a business doing about $183 million in annual sales and around $18 million in annual net income.
