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Stock of the week: Randgold Resources

Written by:
Ian Forrest, investment research analyst at The Share Centre, picks Randgold Resources as stock of the week.

Investors should note that the firm’s quarter four 2016 production numbers were once again encouraging leading to another year of record gold production levels of 1.25m ounces, up 3% on the previous year. With the average realised price of gold up by about 8%, the company generated sales of $1.5bn, which was up by 11% on the previous year.

Management expect further production increases in 2017 and costs to remain under control while there is a focus on exploration as well. Interested investors should also appreciate that this confidence from the management is reflected in the dividend being increased by over 50%, albeit the yield is still modest.

In an uncertain macro-economic and geopolitical environment investors are keen on exposure to gold and gold miners. Out of all the companies in the Mining sector, we would highlight Randgold Resources as our preferred stock. We recommend this stock as a ‘Buy’ for investors looking for capital growth and those that are willing to accept a higher level of risk.

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