Last week I wrote an article suggesting Goldcorp Inc. (TSX:G)(NYSE:GG) could maintain its juicy dividend through the end of the year.

The next day, management slashed the payout by 60%, despite reporting strong Q2 2015 results that indicated the company was under no pressure to reduce the distribution.

Most analysts expected the cut. I thought Goldcorp would hold off another quarter or two.

Solid results and adequate free cash flow

Goldcorp delivered record second-quarter gold production of 908,000 ounces, a 40% increase over the same period last year. Adjusted operating cash flow was US$358 million in the quarter. Free cash flow for the quarter was US$174 million before paying the dividend and US$50 after dividends.

That’s hardly the type of earnings report that forces management teams to go into panic mode.

Why did Goldcorp act?

Gold prices have been on a nasty slide in recent weeks, and now trade below US$1,100 per ounce. Most predictions in the market are for continued weakness in the precious metals sector.

Goldcorp might be taking a cautious approach given the current market conditions, but I think the company is building up a war chest to make acquisitions.

During the second quarter, Goldcorp sold its 26% interest in Tahoe Resources for $998.5 million and raised its credit facility by US$1 billion.

The dividend cut will preserve another US$124 million per quarter.

With most of its peers up against the ropes, Goldcorp is in a position to acquire prime properties at very reasonable prices. Competition for top assets should be limited because most companies don’t have the balance sheet strength to go on a buying binge.

Goldcorp finished Q2 with cash and short-term investments of US$994 million and only US$3.36 billion in long-term debt. This means management has the flexibility to do a significant deal while valuations in the sector are still attractive.

Should you buy Goldcorp?

Production for 2015 is expected to be near the top end of guidance and projections for all-in-sustaining costs have been reduced to US$850-900 per ounce from previous expectations of US$875-950 per ounce.

The stock currently trades at just 0.6 times book value and 19.3 times forward earnings, which are appealing metrics compared with the five-year averages.

If you are a gold bull, Goldcorp is a solid bet right now. Any recovery in gold prices could send the stock significantly higher, especially considering the size of the sell-off.

Weaker gold prices will certainly put more pressure on the stock, but the upside potential probably outweighs the downside risk at this point.

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Fool contributor Andrew Walker owns shares of Goldcorp Inc.