Why I Believe Randgold Resources Limited Will Outperform Glencore PLC, Tullow Oil plc, Rio Tinto plc And BHP Billiton plc After Record-Breaking Production

Randgold Resources Limited (LON:RRS) (LSE:RRS.L) could rise faster than Glencore PLC (LON:GLEN) (LSE:GLEN.L), Tullow Oil plc (LON:TLW) (LSE:TLW.L), Rio Tinto plc (LON:RIO) (LSE:RIO.L) and BHP Billiton plc (LON:BLT) (LSE:BLT.L) on 52% dividend hike

Randgold Resources Limited
Randgold Resources Limited

Randgold Resources Limited (LON:RRS) (LSE:RRS.L) has released an update for 2016. It shows it has increased production for the sixth successive year, while reducing total cash cost per ounce. Profit of $294.2 million is 28% higher than the prior year and the board has proposed a 52% increase in dividends to $1 per share.

Randgold Resources has also surpassed its net cash target of $500 million, with $516.3 million in the bank at the end of 2016. This is a surprise in my opinion, since I had expected the company to miss its target as the price of gold fell below $1200 per ounce. However, with no debt, the company looks to be in a strong position.

There was strong progress at the flagship Loulo-Gounkoto mine in Mali, with annual guidance exceeded by 37,000 ounces at its lowest ever cash cost per ounce. Randgold Resources’ other mines registered solid performances to contribute to a total production of 1,252,957 ounces at a total cash cost of $639 per ounce.

In my view, Randgold Resources’ share price will rise faster than those of Glencore PLC (LON:GLEN) (LSE:GLEN.L), Tullow Oil plc (LON:TLW) (LSE:TLW.L), Rio Tinto plc (LON:RIO) (LSE:RIO.L) and BHP Billiton plc (LON:BLT) (LSE:BLT.L). I feel the company is in a strong position financially and in terms of its exploration programme and cost base.

Although I also feel Glencore, Rio Tinto, Tullow Oil and BHP Billiton could be worth buying, my view on gold is more bullish than for oil, iron ore and other commodities. I think the global economy will face a period of higher inflation brought on by Trump’s pending economic policies, while uncertainty could also attract investors to gold. Therefore, I feel gold mining shares could be big winners this year, with Randgold Resources one of my top picks from the sector and a company I hold within my own portfolio of shares.