The Federal Reserve’s recent rate cut has driven investors toward safe haven assets like gold. However, with gold reaching record highs, many investors are seeking alternative diversification options, particularly those looking for a hedge against the weakening dollar. Enter silver, a shining contender with a strong case for consideration.
Silver has mirrored gold’s upward trajectory, climbing over 29% in the past year. Its lower price point compared to gold makes it more accessible for investors seeking to acquire physical metals. Furthermore, silver boasts a wide range of applications, playing a crucial role in electronics, solar components, and numerous other products due to its conductivity.
For those seeking exposure to silver without the hassle of storing physical metal, silver ETFs offer a convenient solution. Aberdeen Standard Physical Silver Shares ETF (SIVR) stands out with its impressive performance and a lower expense ratio compared to popular competitors like iShares Silver Trust ETF (SLV).
However, for investors seeking a more direct investment, silver mining stocks present an attractive option.
Pan American Silver Corp. (PAAS):
With a $7.5 billion market cap, Pan American boasts a robust portfolio of mines across the Americas. Its La Colorada Skarn mine in Mexico is its highest-producing silver mine, and the company recently announced a substantial increase in estimated silver resources there. Analysts anticipate Pan American to more than double its earnings in the coming year due to its expansion plans and healthy free cash flow.Wheaton Precious Metals Corp. (WPM):
Investors seeking stability might find Wheaton an appealing choice. The company generated an impressive $234 million in operating cash flow last quarter and carries a cash balance of over $500 million with no debt. This strong financial position makes it well-equipped to manage various business needs throughout the year. While Wheaton’s silver production is a smaller portion of its business compared to gold, it remains a significant factor, with a 14% increase in silver production compared to the previous year.Newmont Corp. (NEM):
As one of the largest mining companies, Newmont is focusing on streamlining its business. While its primary focus remains gold, it maintains silver mining operations. Newmont aims to sell a number of its mining projects, potentially raising $2 billion. This move could boost its dividend yield and contribute to the analysts’ forecast of over 20% earnings growth in the coming year.Whether you prefer the convenience of ETFs or the direct ownership of mining stocks, silver presents a compelling alternative for investors seeking diversification and a hedge against the dollar in today’s market.
