Although everyone loves talking about gold as a hedge against inflation and market fears in general, the runner-up category of silver stocks to buy deserves special consideration. True, this arena tends to be more speculative than the gold-specific market, which already incurs volatility risks. However, those that trade the white metal could see higher return potential.
To be clear, because of the inherent wildness and unpredictability of silver stocks to buy, only hardened speculators should participate. Nevertheless, those that can accept the risk may enjoy powerful returns. In particular, rising anxieties in the banking sector (again) makes precious metals more attractive based on the fear trade. If you’re looking to profit from the jitters, the below silver stocks to buy could be your ticket to a dramatic upside.
|WPM||Wheaton Precious Metals||$47.02|
|AG||First Majestic Silver||$6.65|
|FSM||Fortuna Silver Mines||$3.56|
|PAAS||Pan Am Silver||$18.02|
Wheaton Precious Metals (WPM)
One of the must-have ideas if you’re interested in silver stocks to buy, Wheaton Precious Metals (NYSE:WPM) specializes in the streaming business model. Rather than mine the metals themselves, Wheaton negotiates deals with mining enterprises. In return for providing upfront capital to these companies, Wheaton will receive all or part of the metals extracted. Under this model, participants benefit from pricing predictability.
Subsequently, the aforementioned predictability helped contribute to Wheaton’s financial stability. Perhaps most prominently, Wheaton enjoys excellent strengths in the balance sheet. For example, its equity-to-asset ratio pings at 0.99 times, above 97% of the underlying industry.
Operationally, Wheaton features a three-year EBITDA growth rate of 34.2%, above 77.77% of the metals and mining sector. For profitability, the company’s net margin stands at 63.19%, better than nearly 96% of the competition. Finally, Wall Street analysts peg WPM as a consensus strong buy. However, the average price target stands at $47.94, implying only 2% upside. Still, for a reliable name among silver stocks to buy, it’s difficult to ignore Wheaton Precious Metals.
Hecla Mining (HL)
Founded in 1891, Hecla Mining (NYSE:HL) features one of the most storied histories among silver stocks to buy. To be fair, Hecla doesn’t just focus on the white metal. Throughout its operations, it targets gold and other precious metals. Since the January opener, HL gained more than 4% of its equity value. In the trailing year, it’s down almost 13% but that appears to be changing – and soon.
Before investors jump aboard Hecla, they should realize that it will require some patience. Notably, the balance sheet features only middling strength. For example, the company’s Altman Z-Score is 2.34, which places it between the distressed and safe zone (regarding bankruptcy risk).
Still, it’s also important to remember that several silver stocks to buy suffered throughout the Covid-19 pandemic. As the industry works through the troubles, HL may rise higher, especially now that precious metals garnered much attention. Lastly, covering analysts peg HL as a consensus strong buy. Their average price target comes in at $6.30, implying nearly 7% upside potential.
First Majestic Silver (AG)
For those that want to live a little dangerously with their silver stocks to buy, First Majestic Silver (NYSE:AG) may offer an eventful experience. To start, AG has been wildly volatile, even compared to other precious metals-related enterprises. Since the beginning of Jan., AG dropped 22% in equity value. In the trailing year, it’s down nearly 53%.
Much of the negative attention on AG centers on the financials. In 2022, First Majestic suffered an operating loss of $51.6 million. The red ink led to a net loss of $114 million, a poor comparison to the $4.9 million lost in 2021. Still, for contrarian investors, they should also realize that First Majestic generated revenue of $626.9 million last year. Against 2021’s result, the company experienced nearly a 7% lift. In closing, covering analysts peg AG as a consensus hold. However, their average price target stands at $7.81, implying over 19% upside potential.
Fortuna Silver Mines (FSM)
A Canada-based precious metals mining firm, Fortuna Silver Mines (NYSE:FSM) has operations in Argentina, Burkina Faso, Mexico, and Peru. Primarily, Fortuna focuses on producing silver and gold minerals. Since the January opener, FSM lost more than 6% of its equity value. However, in the trailing month (during the banking sector fallout), shares gained over 10%.
Moving forward, FSM could be one of the more intriguing silver stocks to buy. Admittedly, the company doesn’t have the greatest stability in the balance sheet. However, it attempts to make up for it through robust operations. Specifically, Fortuna’s three-year revenue growth rate pings at 15.6%, above nearly 70% of the industry. Also, its free cash flow (FCF) growth rate during the same period is 40.9%, above 85.43% of rivals.
Notably, FSM trades at 0.83 times its book value. In contrast, the sector median value is 1.54 times. Turning to Wall Street, analysts peg FSM as a consensus moderate buy. Further, their average price target stands at $4.30, implying over 21% upside potential.
Silvercorp Metals (SVM)
Billed as a Canada-based, China-focused precious metals firm, Silvercorp Metals (NYSEAMERICAN:SVM) focuses on the acquisition, exploration, and development of silver-containing properties. Per its public profile, Silvercorp is China’s largest primary silver producer. Since the Jan. opener, SVM gained almost 17% of its equity value. In the trailing year, it still has some catching up to do, down 9%.
Nevertheless, SVM ranks among the more enticing silver stocks to buy. Notably, Silvercorp owns a stable balance sheet. In particular, its Altman Z-Score pings at 5.01, indicating low bankruptcy risk. Also, its debt-to-EBITDA ratio sits at 0.01 times. In contrast, the sector median soars at 1.54 times. Operationally, the silver miner’s three-year book growth rate comes in at 10.2%, better than 64% of the industry. Also, it’s highly profitable with a net margin of 11.3%.
Looking to the Street, analysts peg SVM as a consensus moderate buy. Moreover, their average price target stands at $4.66, implying nearly 32% upside potential.
Pan American Silver (PAAS)
Based in Canada but with operations in Latin America, Pan American Silver (NASDAQ:PAAS) is one of the world’s biggest silver producers. Specifically, Pan American owns mines and other projects in Mexico, Peru, Bolivia, and Argentina. Since the beginning of the year, PAAS gained nearly 5% of its equity value. In the trailing half-year period, it’s up almost 24%.
Although the company’s been on the move in the charts, prospective investors must exercise patience. Financially, Pan American doesn’t carry the most stable balance sheet. As well, its operations are rather ho-hum. For example, the company’s three-year revenue growth rate is only 3%, ranked worse than 60% of silver stocks to buy. Also, 2022 has been a rough year for Pan American, which saw a net loss amounting to $342 million. In the prior year, the company posted a net income of $97 million.
Nevertheless, analysts peg PAAS as a unanimous strong buy. As well, their average price target stands at $24.43, implying nearly 36% upside potential.
MAG Silver (MAG)
Headquartered in Vancouver, British Columbia, Canada’s MAG Silver (NYSEAMERICAN:MAG) claims to be developing one of the highest grade and largest primary silver assets in the world. According to its website, MAG’s principal focus and asset is the Juanicipio Property in Mexico. Since the Jan. opener, MAG stock plunged nearly 22%, reflecting sharp volatility.
Still, for those that can handle the wild nature of silver stocks to buy may have an intriguing opportunity with MAG Silver. Primarily, the company benefits from a solid balance sheet. In particular, MAG’s equity-to-asset ratio pings at 0.99 times, ranking better than 97% of the competition.
In addition, MAG’s return on equity and return on asset hit 7.41% and 7.3%, respectively. These stats suggest a superior ability to convert equity financing into profits. Lastly, Wall Street analysts peg MAG as a consensus strong buy. In addition, their average price target stands at $18.44, implying an upside potential of 49%.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.