"We like the overall business model and believe the company is well positioned through the cycle," research analysts Jorge Beristain and Chris Terry write in a Sept. 9 research report on Silver Wheaton Corp. (SLW:TSX; SLW:NYSE). "Silver Wheaton has a diverse asset base, proven management team and has access to long-term precious metals streams."
The analysts make note of the company's large portfolio, which includes 22 precious metals assets and includes streams from San Dimas (Primero Mining [P:TSX; PPP:NYSE]) and Salobo (Vale S.A. [VALE:NYSE]). In addition, the company has "a further 8 development projects in the portfolio." Silver Wheaton lists the San Dimas, Peñasquito and Salobo mines, among others, as "cornerstone assets."
"We forecast silver equivalent production of 54.7m oz in 2016 and 57m oz in 2017 which then has the potential to increase in forward years through deals and/or project development with minimal additional overhead," the report states.
Deutsche Bank also notes that "Silver Wheaton has EBITDA margins of ~70%, long-life assets with potential for exploration upside and the ability to invest counter-cyclically versus traditional miners."
In addition, the analysts view Silver Wheaton "as much lower risk alternative than mining company equities given the lack of cost movements and the ability to expand the portfolio with minimal additional corporate overhead. Against ETFs, Silver Wheaton offers the ability to share in exploration upside with mining companies and a growing dividend return."
Commenting on the company's performance over time, the analysts wrote, "Silver Wheaton has consistently outperformed the silver and gold price and silver equity indices as the company has continued to grow cashflow through the cycle and has completed deals counter-cyclical to the rest of the industry."
Read what other experts are saying about:
Want to read more Gold Report interviews like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent interviews with industry analysts and commentators, visit our Streetwise Interviews page.
1) Tracy Salcedo compiled this article for Streetwise Reports LLC. Tracy Salcedo provides services to Streetwise Reports as an independent contractor. She owns, or members of her immediate household or family own, shares of the following companies mentioned in this article: None. She is, or members of her immediate household or family are, paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are sponsors of Streetwise Reports: Silver Wheaton Corp. The companies mentioned in this article were not involved in any aspect of the article preparation. Streetwise Reports does not accept stock in exchange for its services. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their families are prohibited from making purchases and/or sales of those securities in the open market or otherwise during the up-to-four-week interval from the time of the interview or article until after it publishes.
Deutsche Bank Markets Research, Silver Wheaton, Sept. 9, 2016
Deutsche Bank and/or its affiliate(s) owns one percent or more of a class of common equity securities of this company calculated under computational methods required by US law.
The views expressed in this report accurately reflect the personal views of the undersigned lead analyst(s) about the subject issuer and the securities of the issuer. In addition, the undersigned lead analyst(s) has not and will not receive any compensation for providing a specific recommendation or view in this report. Jorge Beristain/Chris Terry
The Deutsche Bank Research Department is independent of other business areas divisions of the Bank. Details regarding our organizational arrangements and information barriers we have to prevent and avoid conflicts of interest with respect to our research is available on our website under Disclaimer found on the Legal tab.
Additional disclosures are available here.