Financial analysts from advisory firm Shaw and Partners and investment bank UBS agreed BHP Group Plc will reap the benefits of numerous strategies and a balanced portfolio, with the resources experts expecting the mining giant to surpass rival Rio Tinto this year, the Australian Financial Review reported Jan. 3.
Shaw and Partners analyst Peter O'Connor noted that "there are a lot of tactical reasons that will [increase] BHP's share price relative to its peers."
"The really easy answer is BHP is going to do really well," he said.
Share buybacks in December 2018 and the payment of a fully-franked special dividend in January 2019, representing a return of US$10.4 billion to shareholders after the sale of its U.S. shale oil and gas assets, are just some of the reasons that might push BHP to the forefront in 2019.
UBS analyst Glyn Lawcock also sees BHP outperforming Rio Tinto due to balanced investments this year.
"[BHP] is more stable as its assets are not subject to as much country risk and it's likely better able to weather potential further trade war tensions, and has only just commenced its returns journey," Lawcock added.
"They're going to track each other pretty close. I think BHP will be ahead in the first part of the year, and then they'll be neck and neck, and Rio will be more subject to what it buys," said O'Connor, noting the possibility that Rio Tinto will pull ahead later in the year.
Additionally, O'Connor expects nickel and copper, commodities that lagged in 2018, to "do better" this year.
O'Connor added that, even though the volatility of the Trump tariffs imposed on commodities meant more investors were attracted to gold in 2018, it won't be the case this year if uncertainty over trade wars and the oil price is resolved, then "gold won't be the place to be."
UBS, meanwhile, remains neutral on gold, according to the report.