The world has already hit peak silver production, and silver has been too cheap for too long to spur much silver exploration, asserts Sean Brodrick, editor of Wealth Megatrends.
Meanwhile, the global economy is shifting into higher gear coming out of the Covid pandemic. Why does this matter for silver? Industrial applications account for roughly 60% of the global silver consumption. For example, silver is vital to the building of efficient solar panels.
Consider buffing up your silver holdings with Pan American Silver Corp. (PAAS), which is based in Canada but operates in the U.S. and Latin America.
The company has nine producing mines and digs up silver, gold, zinc, lead and copper. And it has a total reserve base of 550 million ounces of silver and 5.2 million ounces of gold.
Covid-19 slapped this stock around in 2020 like it did to most miners. Two of Pan American’s mines in Peru had to suspend operations for most of the third quarter due to the pandemic and its metal production dipped. Nonetheless, the company posted net earnings growth of 73%.
Meanwhile, the company bought Tahoe Resources for $1 billion in 2019, with the main prize being the troubled Escobal silver mine in Guatemala. That could be one of the biggest primary silver mines in the world, if they can ever solve local troubles.
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The previous operator, Tahoe, lost a court case and had to shut down. Pan American is confident they will be able to get approval to restart mining operations. Helping that view is that a new pro-mining President was elected in Guatemala at the beginning of last year.
The company reports full-year results on Feb. 19. It is projected to earn 89 cents a share for 2020, up 45% over last year. In 2021, earnings are forecast to rise 191%. Pan American pays a dividend of 7 cents a share and goes ex-dividend on Feb. 26. That dividend is projected to rise 15% per year for the next three years.
So, we’ve got growth, a potential massive silver mine coming online, silver and gold and rising dividends. Buy this stock on any dip; it should be much higher a year from now.
