The recent tumble in the price of silver didn’t spare silver companies such as Silver Wheaton (SLW), Pan American Silver (PAAS) and First Majestic Silver (AG). But if silver were to recover, does Silver Wheaton measure up to other silver producers?
I think that compared to other leading silver producers, Silver Wheaton’s business will be less adversely impacted by another tumble in silver. Also, if silver were to recover, the company’s business offers lower risk, and higher cash flow to expand its operations at a fast pace. Nonetheless, silver producers such as First Majestic Silver offer other relative advantages including higher potential gains in the stock market but come at a higher risk.
In the past few years, the decline in the price of silver as indicated in the annual changes in the price of Shares Silver Trust (SLV) resulted in silver producers under-performing silver and Silver Wheaton. Back in 2012 when silver saw a modest gain (on a yearly scale) Silver Wheaton has also outperformed several leading silver producers.
But back in 2010, when silver jumped by over 80% First Majestic Silver’s stock outperformed Silver Wheaton. In any case, Silver Wheaton rose by a much higher than margin than silver. Keep in mind, however, the volatility of First Majestic Silver’s stock in the past few years was much higher than other silver investments. This means, with higher daily percent changes, First Majestic Silver’s stock seems riskier than SLV, Silver Wheaton and Pan American Silver.
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