The situation over how, or even if, the country departs on that date remains as clear as mud. The civil war in the Conservative Party, its fragile alliance with the DUP, the possibility that EU members like Spain may try to veto May’s much-maligned deal with Brussels, all leave a variety of scenarios up for grabs from a no-deal exit to a second referendum being called.

One thing’s for sure: expect more volatility in the weeks and months ahead on the financial markets. And for some FTSE 100 stocks, from UK-focused banks like Lloyds to retailers such as Marks & Spencer, the long-term outlook remains less than robust as the possibility of a cataclysmic EU departure persists.

Medical marvel

But I think a share that’s unlikely to be moved, whichever way the UK deals with the Brexit problem, is AstraZeneca (LSE: AZN).

That’s not to say the medicines giant isn’t immune to any short-term hiccups and like its rivals, it has been stockpiling its products in case of any future supply disruptions into Britain. But this will likely be the beginning and end of its problems — Britons will still need their medicines, regardless of the economic consequences of summer 2016’s referendum, after all.

Anyway, AstraZeneca’s pan-global operations mean that conditions in its UK marketplace aren’t the be-all-and-end-all for the business. Indeed, with sales to emerging markets in particular surging (up 12% in the third quarter) and demand for its new medicines also booming (up 85% in the same period), I believe that the sales outlook is better than its been for many years.

Strike gold

If you’re looking to actively play the Brexit saga rather than avoid it, then I feel Randgold Resources (LSE: RRS) could be a great Footsie stock to buy today as well.

The gold digger’s share price continues to rise on the back of a robust gold price and it hit fresh nine-month highs late this week. As I noted last time I covered the Footsie stock, retail demand for precious metals remains strong at the moment and, added to this, purchases from central banks are also the largest that they’ve been for a very long time.

It could also be argued that, irrespective of how Brexit is finally resolved, having some exposure to gold via either the physical asset itself or by owning companies like Randgold is a good idea given the broad array of geopolitical and macroeconomic uncertainties currently swirling around, from concerns over rising interest rates in the US to slowing economic growth in the eurozone.

But I would much prefer to hold shares in Randgold than the physical metal because of its bumper dividend yields of 4.5% in 2018 and 5.8% in 2019. AstraZeneca is also a great choice for income chasers, in my opinion, in part due to its inflation-beating 3.5% yield through to the end of 2019. I consider both businesses as great shares to buy today and hang on to for long into the future, and not just on account of those bulging medium-term yields.

The post Don’t panic! How I think you can Brexit-proof your shares portfolio with these FTSE 100 dividend stocks appeared first on The Twelfth Magpie.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has recommended AstraZeneca and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Yesterday, the £7bn-cap’s stock soared just over 9% to make it the big riser on the day in the market’s top tier. The latest rise also takes the total gain to almost 27% in under two weeks. 

I don’t see any reason to snatch at profits just yet, despite today’s rather mixed production update.

Production up

As a result of higher ore grades, higher volumes, and the contribution from the company’s new Pyrites Plant, silver production rose 6.3% (to 15.5 moz) in the three months to 30 September, compared to the same period in 2017. This brings production so far this year to 46.3 moz — a rise of 8.5%.

Despite this, full-year guidance was lowered to between 62 and 64.5 moz (from 64.5-67.5 moz) as a result of “continued challenges” at the company’s Fresnillo and Saucito mines, issues which are currently being addressed.

But Fresnillo isn’t all about silver. It’s also Mexico’s largest gold miner. Production here fell by 3.5% in Q3 compared to 2017, and by 3.7% compared to the previous quarter, due partly to lower ore grades. Nevertheless, production of the shiny stuff “continues to beat expectations,” having climbed 1.7% in the year to date, with full-year guidance now expected to be between 920 and 940 koz.

Fresnillo’s stock was down in early trading, although I’m inclined to think this is more the result of short-term traders banking some profit. 

On a forecast price-to-earnings (P/E) ratio of almost 20 for the current year, it certainly isn’t cheap to buy. The likely 30 cents per share dividend for the full year equates to a yield of almost 2.6% — very average compared to some payouts offered by companies in the market’s top tier.

Having said this, Fresnillo’s performance over the last few weeks, coupled with the fact that its stock is highly-liquid, suggests it might be a decent pick, if you suspect volatility is here to stay.  

Contrarian call

Fresnillo’s done well in what’s rapidly become a tough market. However, one company that’s performed even better in recent times has been fellow FTSE 100 constituent and industry peer Randgold Resources (LSE: RRS).

Since falling to a low of around 4650p back in mid-September, the gold miner’s share price has soared 38% — the sort of gain you would expect from high-growth market minnows, rather than a top-tier juggernaut. My contrarian call back in August was a touch too early, but still rather pleasing.

Can Randgold hold on to recent gains? Difficult to say.

Should markets rebound strongly, the share price will likely fall as investors assume a risk-on attitude once more. The fact that the company will soon delist as a result of its merger with Canadian company Barrick Gold could also see money being moved elsewhere in advance.

Personally, I continue to think that having some exposure to gold — either through an exchange-traded fund, or as an actual miner — isn’t a bad thing in these uncertain times, given that the value of the precious metal tends to be negatively correlated with stock markets in general.

Whether you subscribe to this view or not, Randgold’s recent performance is yet more proof that backing quality companies, at a time when they’re being shunned by most market participants, can result in great profits. 

The post Markets have been falling but these FTSE 100 stocks have been soaring! appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has recommended Fresnillo. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

However, glass-half-full investors will be hoping that the recent uptick in Randgold’s share value marks the start of a recovery. Gold prices has remained broadly unchanged either side of the $1,200 per ounce marker over the past month, but the metal digger has jumped after it sealed a monster merger with fellow mining colossus Barrick Gold to create the world’s largest gold miner, with total proven and probable attributable gold reserves of some 78m ounces.

It’s no surprise that the market responded to news of the creation of the new entity, ‘New Barrick Group’, with glee. As the firms said in their joint release, the tie-up “will create an industry-leading gold company with the greatest concentration of tier one gold assets in the industry, the lowest total cash cost position among senior gold peers, and a diversified asset portfolio positioned for growth in many of the world’s most prolific gold districts.”

The deal, which is expected to be completed by the end of next March, will see Barrick shareholders assume 66.6% of New Barrick, and Randgold shareholders the remaining 33.6%.

Dividends to continue dancing higher

The financial might of this combined entity also bodes extremely well, and not only in terms of advancing its exploration work among some of the planet’s best gold resources and bringing them online.

Indeed, New Barrick’s mighty management team has already suggested that delivering brilliant dividend growth to its shareholders sits extremely high on the agenda, the company publicly stating last week its intention of “[growing] its dividend from the Barrick level… over time, underpinned by stronger cash flow generation, additional overhead cost savings, asset sale proceeds and lower interest costs.”

I’ve been lauding the exceptional earnings and dividend outlook for Randgold shareholders for some time now, helped by the stable environment for bullion prices as well as the impact of its jumping production levels. The mega-merger now gives both profits and payout prospects at the gold digger a serious shot in the arm.

In the meantime, a payout of 278 US cents per share is still forecast by City analysts for 2018, a figure that yields an inflation-mashing 4%. A forward P/E ratio of 23.9 times is clearly not as attractive, sitting outside the accepted value territory of 15 times and below. Still, I’d consider that reasonable to grab a slice of New Barrick and its incredible investment potential.

The post Down but not out! An unloved FTSE 100 dividend stock that could help you to retire rich appeared first on The Twelfth Magpie.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The newsflow from Westminster or Brussels hasn’t become any more encouraging that a deal can be agreed in the coming months, raising the risk to the vulnerable FTSE 100 shares which I examined in the aforementioned article.

However, there’s no reason for share investors to reach for the cyanide as there remains plenty of stocks that could thrive in the event of a no-deal Brexit.

Precious picks

Let’s take the precious metals producers Randgold Resources and Fresnillo, for example.

The groundshaking decision of the UK electorate in June 2016 prompted a demand surge for safe-haven assets such as gold and silver, as one would expect, and thus shares in the Footsie’s dedicated diggers. Randgold surged to record highs above £97 per share while Fresnillo rocketed to its own peaks, north of £20.

Both firms’ share prices have reversed significantly since then, leaving plenty of room for another surge should a terrifying no deal exit occur. There’s plenty of geopolitical and economic issues that could drive precious metals values sky-high again, and a painful Brexit is one of them.

Eastern promise

In the article I referenced at the top of this piece, I explained why a disorderly EU withdrawal could play havoc with the banks such as Lloyds, RBS and Barclays. And this is reflected in the steady market value shrinkage of these firms.

The same cannot be said for HSBC Holdings, however. Indeed, after a muted reaction in the fallout of the 2016 summer vote, the bank’s stock price has swelled. The Footsie bank would see some disruption to its UK and European operations in the event of a no-deal withdrawal. But in the overall scheme of things, the impact on the business is minimal.

HSBC, after all, generates almost 90% of profits from the hot emerging markets of Asia. And the earnings outlook in this region looks splendid, on account of rampant population growth and rising banking product demand. Investors looking for a slice of the banking sector could be forgiven for dumping the British-focussed banks for HSBC in the event of a no-deal exit.

Consumer goods goliaths

I would also expect demand for fast-moving consumer goods leviathans Unilever, Reckitt Benckiser and Diageo to thrive if Britain can’t agree to a favourable withdrawal pact.

Like Randgold Resources, HSBC and Fresnillo report in non-sterling currencies, a scenario that should give their earnings a bounce in the event of a no-deal Brexit amid a likely dive in the value of the pound.

Secondly, these businesses also generate the lion’s share of their revenues outside of the UK (and indeed Europe), providing plenty of protection from an economically-disruptive Brexit. And thirdly, the exceptional customer loyalty that these companies’ labels command, from Diageo’s Guinness to Reckitt Benckiser’s Durex to Unilever’s Dove soap, provides another reason why earnings should continue marching higher.

The post 6 FTSE 100 dividend stocks that could surge on a ‘no-deal’ Brexit appeared first on The Twelfth Magpie.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK owns shares of and has recommended Unilever. The Motley Fool UK has recommended Barclays, Diageo, Fresnillo, HSBC Holdings, and Lloyds Banking Group. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Gold prices continue to muddle just below the $1,200 per ounce barrier and with this psychologically-critical level now having been breached, it’s possible that bullion could extend its recent downtrend. Fresh dollar strength, allied with the prospect of growing fears over US President Trump’s determination to invoke trade wars with the rest of the planet, could certainly provide the ammo for new drops.

Falling demand for the safe-haven metal is not the only factor that has pressured Randgold’s stock value more recently, with industrial action in the Côte d’Ivoire also muddying investor appetite. The latest episode at its Tongan mine was resolved last week but the danger of fresh action is never far away, such is the nature of mining in Africa.

I remain convinced that Randgold remains a splendid pick for long-term investors, however, and that recent share price falls (which now leave it dealing at 17-month lows) represents a great buying opportunity.

A compelling long-term pick

As I remarked last time out, the Footsie-quoted digger has embarked on exploration work across the African continent to keep production and thus profits on an upward slant in the years ahead. What’s more, Randgold’s 10-year business plan has been designed to guarantee that the business remains profitable, even if gold prices fall as low as $1,000 per ounce, providing investors with plenty of reassurance.

Not that I reckon values are in danger of falling near this level. As I said, metal values may fall further in the near term, but I believe in the eternal appeal of gold as an investment vehicle and foresee only limited downside in the current environment. Besides, gold’s role as an industrial metal across an increasing number of applications should also support bullion values.

It may be an understatement to say that Randgold’s share price has taken a bit of a whack, the business having ducked 40% over the past 12 months. Some investors may baulk at the idea of splashing the cash on a stock still dealing on a forward P/E ratio of 20.7 times, though, a reading that sits outside the widely-accepted value territory of 15 times and below.

But there are two schools of thought. Firstly, although subdued gold prices are expected to result in an earnings rise of just 1% in 2018, City brokers are expecting better production levels next year, allied with a likely uptick in metal prices, to underpin a 21% profits rise.

Secondly, Randgold’s vast dividend yields also take much of the sting out of its elevated earnings multiple. For this year a projected 278 US cents per share dividend yields 4.4%. And the dial sprints to 5.7% for next year thanks to the predicted 359 cent payout.

I’ve long been a fan of the gold Goliath and, while conditions have become more challenging of late, I still reckon it’s a share that could deliver blowout shareholder returns.

The post Have £1,000 to invest? An expensive (but exceptional) FTSE 100 dividend stock that could help you to retire early appeared first on The Twelfth Magpie.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Priced just under 5,500p a pop, the company has lost 33% of its value since last September (and more today) thanks to the surprising tumble in the value of the precious metal. 

I say ‘surprising’ for the simple fact that gold has long been considered a safe haven in troubled times. Pull up a graph of its price in the aftermath of the financial crisis and you’ll see what I mean.

More recently, however, this trend hasn’t been in evidence. Thanks to the strengthening dollar (which makes gold increasingly more expensive for investors holding other currencies), even the threat of a global trade war hasn’t stopped the price of the shiny stuff slipping from $1,360 in mid-January to around $1,215 today. 

Over at Randgold, things are a bit more positive. Production at its Kibali mine hit a record 201,742 ounces in Q2 — up 17% on Q1. As a result, the mine is now likely to exceed production forecasts for the current financial year. Elsewhere, performance at the company’s Loulo-Gounkoto complex also rose, by 4%, to a little over 150,000 ounces. Total gold production rose 9% over the last quarter.

Encouragingly, more of this gold is also being sold. Sales climbed 5% to $411.5m in Q2, despite the ongoing fall in price.

In other news, the company expects to make a final investment decision on its promising Massawa project in Senegal by the end of 2018. As far as exploration is concerned, Randgold also reflected on “significant progress” being made at various sites which serve to “reinforce” the company’s 10-year business plan. And the firm remains profitable so long as gold holds above $1,000 an ounce.

It wasn’t all good news, however. Production at the company’s Tongon mine in Cote D’Ivoire continues to be impacted by a number of work stoppages. The latest — occurring after the end of Q2 — necessitated the revision of annual production forecasts to “around 250 koz”. Notwithstanding this, CEO Mark Bristow stated that Randgold had been reassured by the government’s efforts to “protect the assets” and deal with the situation, adding that recent strong performance should mean that production and cost guidance for the current year can still be met. 

Bumper yield

Based on today’s price, shares in Randgold can be picked up for 22 times forecast earnings, reducing to 19 next year. These may seem high numbers but they’re actually fairly decent for a company whose stock is rarely cheap. The shares could move lower, of course, but — from a long-term perspective — I think these are already starting to offer quite a bit of value. 

Those concerned by the ongoing price weakness may also be comforted by the fact that Randgold is likely to return $2.82 per share in 2018, equating to a yield of 4%. Assuming analysts are correct in their predictions, a 32% hike in 2019 will bring the yield to 5.25% — tempting for a company that also boasts the quality of being debt-free. 

Holding gold (or any producer) won’t be to every investor’s taste but, for those looking to build a seven-figure diversified portfolio that performs in both good and bad times, I think Randgold could be a great addition for when markets eventually wobble.

The post This FTSE 100 contrarian stock could help you make a million appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The gold digger’s share price has skidded more than 25% lower in the year to date, its share action reflecting the steady slide in bullion values. The precious metal has fallen below the $1,300 per ounce marker seen at the start of the year and, with central banks engaging in further monetary tightening recently and the US dollar strengthening, it now trades within a whisker of the $1,200 watermark as of pixel time.

However, signs are emerging that this harsh selling activity could be starting to die down. The World Gold Council’s latest report showed outflows in gold-backed exchange-traded funds slowing in July — 39 tonnes of material was sold last month, taking total holdings to 2,394 tonnes. This is a slowdown from the 49 tonnes sold off in June.

These figures don’t warrant breaking out the fireworks, clearly. But they could be a sign that gold demand could be on the turn. That wouldn’t be a surprise to me as the chances of an economically-disruptive Brexit, intensifying trade wars between the US and, well, everyone else, and the chances of a sharp economic slowdown in the eurozone remain high.

Near-term trouble?

That said, though, it would not surprise me if Randgold’s share price suffered in the aftermath of second-quarter financials scheduled for tomorrow (August 9).

The company has endured strike action at its Tongon mine in Côte d’Ivoire in recent weeks, and this, allied with troubles at the complex earlier in the year, could force the business to downgrade its full-year production estimates.

Still, over a medium-to-long-term time horizon I believe Randgold remains a compelling selection. I am still convinced there is plenty of macroeconomic and geopolitical strife in the system that should keep precious metals prices broadly stable, and the Jersey-based digger is well positioned to benefit from this environment via measures like the ramp-up of output at its Kibali asset in the Democratic Republic of Congo and moves to forward the Gounkoto super-pit project in Mali.

Delicious dividends

In the meantime, City analysts are forecasting earnings rises of 5% in 2018 and 17% next year. It’s true that the operational troubles seen earlier this year could blow these forecasts a little off course, although I think dividend projections are looking fairly robust.

The number crunchers are predicting payouts of 280 US cents per share this year and 370 cents in 2019. These forecasts may be roughly in line with estimated earnings through to the end of next year, but I am convinced the mining giant’s robust balance sheet should help it weather any bottom line troubles and keep payouts rising. Randgold’s cash and cash equivalents rose 3% quarter-on-quarter in the three months to March, to $739.5m, and it has no debt on its books.

A forward P/E ratio of 22.8 times may be expensive, but I believe the FTSE 100 company’s robust long-term profits outlook makes it worthy of such a premium. Besides, chunky dividend yields of 4% for this year and 5.2% for next year help to take the edge off. I reckon Randgold is a brilliant income share to load up on. Just hold off until those second-quarter results come out, maybe!

The post Could this sinking FTSE 100 dividend stock be about to turn higher? appeared first on The Twelfth Magpie.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

As I noted last time out, the threat created by the slowing UK economy concerns me greatly and I feel that the FTSE 100 bank might not be able to keep delivering the terrific earnings and thus dividend growth of recent years.

Throw a spike in PPI provisions into the equation, and suddenly Lloyds’ 5%+ yields look a little less convincing. In my opinion there’s plenty of better Footsie-quoted income stocks to choose from, including the two I mention here:

A golden selection

A recent downdraft in gold prices has obviously been mirrored by a decline in the share value of precious metals diggers like Randgold Resources (LSE: RRS).

This is a great buying opportunity, in my opinion. There’s no shortage of macroeconomic and geopolitical drivers at the moment that could send bullion prices skywards again, from President Trump’s escalating trade wars and muddled Brexit negotiations through to signs of overheated stock markets.

But aside from these positive near-term factors, in the years ahead, gold’s role as an industrial metal as well as an investment vehicle should go from strength to strength as usage in the electronics, healthcare and chemicals segments steadily grows.

Randgold has already proved its mettle (no pun intended) as a great growth dividend stock, the digger having quadrupled shareholder rewards during the past five years.

And with earnings expected to keep rising at an impressive pace — advances of 10% and 14% are forecast for 2018 and 2019 respectively — it should come as no surprise that further impressive progress is anticipated by City brokers.

Last year’s 200 US cents per share dividend is predicted to rise to 293 cents in the current period and again to 399 cents in 2019. Thus this year’s 3.8% yield leaps to a terrific 5.2% for next year.

Gold has been a classic dual-role metal for centuries and I am convinced demand is only set to get bigger. Randgold may be expensive on a forward P/E ratio of 23.3 times but I reckon the miner is still an exceptional buy for long-term investors.

The 6%+ yielder

Legal & General Group (LSE: LGEN) is another big yielder which, thanks to a rich recent history of profits growth, has enabled dividends to grow at a fantastic rate too (65% over the past five years, to be precise).

Though a rare 8% profits dip is predicted for 2018, City analysts still believe the financial giant has what it takes to lift the dividend again. The 16.4p per share payout currently anticipated is up from 15.35p last year and yields a stunning 6.3%.

We can look to Legal & General’s robust balance sheet and surging cash flows as the cause for such optimism. This, combined with an estimated 10% profits rebound next year, leads to expectations of another dividend rise to 17.5p, too, meaning the yield marches to 6.7%.

Right now Legal & General can be picked up on a forward P/E ratio of 9.4 times. Given that demand for the company’s investment products looks dead set to keep on thriving, this reading (not to mention its stunning yields) makes it too good to miss.

The post Searching for high yield? Forget Lloyds and check out these FTSE 100 stars instead appeared first on The Twelfth Magpie.

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Royston Wild has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

The near-term outlook for Vodafone (LSE: VOD) may appear to be relatively uncertain. The company recently announced that its CEO will depart in October after 10 years in the job. During that time, he has been able to turn the company into a more diverse and sustainable growth opportunity, with its forecasts over the next couple of years being positive.

As such, many investors will argue that he will be missed. However, with the stock offering a wide margin of safety and a sound strategy, it seems to have upside potential. Alongside a FTSE 100 peer, outperformance of the wider index could therefore be ahead.

Growth potential

With Vodafone having focused on expanding its products and services in recent years, it seems to be in a strong position to offer a more sustainable growth outlook. Part of its strategy has been to engage in M&A activity, with its latest acquisition being Liberty Global’s cable assets in Germany and Central and Eastern Europe. This will help to challenge dominant incumbents in those markets and could provide a growth catalyst over the medium term.

The company has also maintained a high level of investment in its network quality, which has helped to boost its operational performance. The impact of its investment on earnings growth is set to be significant, with net profit forecast to rise by 22% in the next financial year. This puts the stock on a price-to-earnings growth (PEG) ratio of just 0.9, which suggests that it offers a wide margin of safety.

Income potential

As well as its capital growth prospects, Vodafone also remains a solid income play. Its dividend yield currently stands at over 6%. And with shareholder payouts expected to rise by 4% in the next financial year, it could offer a real-terms rise in income for its investors. Furthermore, with the company continuing to diversify into new regions and new business segments, it could provide a sound and sustainable income growth outlook over the medium term.

Fundamental strength

Also having the capacity to beat the FTSE 100 in 2018 is gold miner Randgold Resources (LSE: RRS). The company is expected to deliver a bottom line increase of 13% in the current year, followed by further growth of 10% next year. This could boost investor sentiment towards the stock. And while investor sentiment may be upbeat towards the wider index at the present time, history shows that volatility is likely to return over the medium term.

In such a scenario, gold miners could prove popular. Gold is still viewed as a defensive asset. Since inflation is expected to rise across the globe in future years, it could become increasingly in-demand as a store of wealth.

With Randgold Resources expected to have a dividend yield of 4.7% next year, it seems to provide a strong income outlook. With a large net cash position, its development potential remains high, while a solid track record of improving operational performance could mean it has an attractive risk/reward ratio.

The post Why the Vodafone share price could smash the Footsie this year appeared first on The Twelfth Magpie.

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Peter Stephens owns shares of Randgold Resources Ltd. and Vodafone. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Under the stewardship of David Potts, the retailer has come a long way since the share price lows of around 142p at the end of 2015 — recovering almost 80% in value to change hands a smidgen over 250p. Sure, you could find better performers elsewhere but, given the hyper-competitive nature of the market in which Morrisons operates, the fact that it’s been able to win over so many investors is still some achievement.

Based on current trading, I wouldn’t blame owners for thinking there’s more to come. Hailing a “strong start” to its new financial year, the company recently reported a 3.6% rise in like-for-like sales (excluding fuel) over the 13 weeks to 6 May. Comments relating to store openings, a promising start to its deal with McColl’s and further indications that net debt will continue to fall over 2018 were also encouraging.  

But therein lies the problem. With stock trading on a valuation of 20 times earnings, I think a lot of these positive developments are already firmly priced in by the market. And that’s before the elephant in the room has even been mentioned.

If allowed to go ahead, the proposed merger between Asda and Sainsbury’s will leave Morrisons a very distant third in terms of market share. With Aldi and Lidl continuing to snap at its heels and a bid from US giant Amazon remaining unlikely, that’s not an enviable position to be in.

Given the uncertainty ahead — and a really-rather-average dividend yield compared to payouts from some of its FTSE 100 peers (2.7%) — I’d be tempted to bank some profit and move on.

One for the market bears

Despite the negative sentiment surrounding the company over the last few months, big miner Randgold Resources (LSE: RRS) is one stock I’d be far more likely to buy at the current time.

Last week, the company announced that Q1 gold production had dropped 11% year-on-year to a little under 287,000 ounces, partly due to work stoppages at its Tongon operation in Cote d’Ivoire. At $66.5m, profit was also sharply lower than the $87.1m achieved over the same period in 2017.

On a positive note, the company maintained its annual guidance of between 1.3m and 1.35m ounces.  The aforementioned issues at Tongon appear to have been resolved and the mine is now “committed to clawing back most of the lost production“. Randgold also made reference to “new reserve opportunities” in Senegal and that it was “aggressively hunting” for a new project in Africa.

Of course, owning stock in any company with assets in troubled parts of the world (e.g. Democratic Republic of Congo) comes with a fair amount of risk. Nevertheless, I continue to believe that owning one or two gold-focused stocks — or perhaps an Exchange Traded Fund that invests in a diversified group of such miners — could be a prudent move as we approach what could turn out to be the endgame of this extended global bull market.

A forecast price-to-earnings ratio of 22 doesn’t exactly scream value but this is arguably the price that must be paid for owning a debt free, quality operator like Randgold. A forecast 4% dividend yield takes some of the sting away.

The post Why I’d consider dumping high-flying Morrisons for this FTSE 100 faller appeared first on The Twelfth Magpie.

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Paul Summers has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.