Market analysts and investors often eye silver stocks as low-cost investments in precious metals, particularly as they seek relief from volatile equity markets. Silver benefits from having a wide variety of industrial uses—in dentistry, electrical contacts, water filtration, solar panels, and medical instruments—that supplement the demand for silver in the form of jewelry or as an investment.
Successful silver mining companies are those that not only have the largest or most promising silver resources but also do the best job of controlling production costs. The following are five of the top-rated silver mining companies in the best position to see their revenues, profits, and stock prices climb in the event of rising silver prices.
- Silver is a precious metal that is more affordable per ounce than gold.
- Aside from investment as a commodity, silver has several important industrial applications as well.
- Investing in silver mining companies can be a smart way to gain exposure to both the metal’s value and its demand in manufacturing.
Wheaton Precious Metals Corp.
Wheaton Precious Metals Corp. (WPM), formerly Silver Wheaton Corp., has a unique business model that has made it one of the most successful silver companies. As a silver streaming company, it is not directly engaged in the exploration and development of silver mines. That means it invests in the production of other silver mining companies through long-term purchase agreements that enable it to lock in future silver production at advantageous prices. This business model has helped it grow into the silver mining company with the largest amount of proven and probable silver reserves in the world, with over 200 million more ounces of silver than second-place Fresnillo Plc.
Wheaton is not burdened with all the overhead costs associated with digging silver out of the ground. The company’s operating margin is in the neighborhood of 30%, and with 18 long-term purchase agreements for silver priced as low as $4.55 per ounce, the company is likely to show excellent profit margins for years to come.
Wheaton stock rebounded from its 2015 low at $11.03 per share and in 2019 was trading above $30 per share. With a 2011 high near $47 per share, the company has tremendous upside potential, despite having almost doubled in value during the past year.
Hecla Mining Company (NYSE: HL) is the oldest silver and gold mining company in North America, established in 1891 in Coeur d’Alene, Idaho. It ranks as one of the leading low-cost silver mining companies in the United States.
The company has silver mines in Idaho and Alaska and is rapidly becoming a significant gold producer thanks to its mining operation in Quebec. Hecla Mining has promising exploration and development projects in five additional gold and silver mining operations in the U.S., Canada, and Mexico. The company ranks seventh in world silver reserves with just under 200 million ounces. Its 2017 silver production was 12.5 million ounces.
The company’s solidly established base, diversified revenue stream, and promising current development projects have provided a strong environment for the turnaround in recent years. However, the stock has underperformed its peers and fell to lows of $1.21 in 2019. It now trades $1.84 per share.