Critical Comparison: Tahoe Resources (NYSE:TAHO) vs. Silver Wheaton Corp (WPM)

Silver Wheaton Corp (NYSE: WPM) and Tahoe Resources (NYSE:TAHO) are both basic materials companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, earnings, risk and analyst recommendations.

Volatility and Risk

Silver Wheaton Corp has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500. Comparatively, Tahoe Resources has a beta of 0.47, suggesting that its stock price is 53% less volatile than the S&P 500.

Earnings and Valuation

This table compares Silver Wheaton Corp and Tahoe Resources’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Silver Wheaton Corp $902.00 million 9.33 $617.05 million $0.50 38.08
Tahoe Resources $884.74 million 1.95 $433.59 million $0.55 10.02

Silver Wheaton Corp has higher revenue and earnings than Tahoe Resources. Tahoe Resources is trading at a lower price-to-earnings ratio than Silver Wheaton Corp, indicating that it is currently the more affordable of the two stocks.

Dividends

Silver Wheaton Corp pays an annual dividend of $0.28 per share and has a dividend yield of 1.5%. Tahoe Resources pays an annual dividend of $0.24 per share and has a dividend yield of 4.4%. Silver Wheaton Corp pays out 56.0% of its earnings in the form of a dividend. Tahoe Resources pays out 43.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Tahoe Resources is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

50.4% of Silver Wheaton Corp shares are owned by institutional investors. Comparatively, 64.6% of Tahoe Resources shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Silver Wheaton Corp and Tahoe Resources, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Silver Wheaton Corp 0 1 2 0 2.67
Tahoe Resources 0 7 1 0 2.13

Silver Wheaton Corp currently has a consensus target price of $27.67, suggesting a potential upside of 45.31%. Tahoe Resources has a consensus target price of $19.50, suggesting a potential upside of 253.90%. Given Tahoe Resources’ higher possible upside, analysts clearly believe Tahoe Resources is more favorable than Silver Wheaton Corp.

Profitability

This table compares Silver Wheaton Corp and Tahoe Resources’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Silver Wheaton Corp 25.05% 5.92% 4.75%
Tahoe Resources 19.39% 7.39% 6.26%

Summary

Tahoe Resources beats Silver Wheaton Corp on 8 of the 15 factors compared between the two stocks.

About Silver Wheaton Corp

Wheaton Precious Metals Corp, formerly Silver Wheaton Corp, is a Canada-based pure precious metals streaming company engaged in the sale of silver and gold. The Company operates through eight segments: the silver produced by the San Dimas, Penasquito and Antamina mines, the gold produced by the Sudbury and Salobo mines, the silver and gold produced by the Constancia mine and the Other mines, and corporate operations. The Company has entered into long-term purchase agreements and early deposit long-term purchase agreement associated with silver and gold (precious metal purchase agreements), relating to mining assets, whereby Silver Wheaton acquires silver and gold production at various mines. The San Dimas gold-silver deposit is located in the San Dimas district on the border of Durango and Sinaloa states. The Company holds interest in Los Filos mine, Zinkgruvan mining operations, Stratoni mine, Keno Hill silver, Cozamin mine, Aljustrel mine, 777 mine and Constancia mines.

About Tahoe Resources

Tahoe Resources Inc. is a mine operations, and mineral exploration and development company. The Company’s principal business activities are the exploration, development, operation and acquisition of mineral properties for the mining of precious metals in the Americas. Its business involves operating the Escobal mine, a silver mining operation located in southeastern Guatemala, the La Arena and Shahuindo mines, gold mining operations located in northwestern Peru, and the Bell Creek mine and mill and the Timmins West mine, gold mining operations located in northeastern Ontario, Canada. Its additional business objectives include the expansion of gold production at the Shahuindo and Bell Creek mines, the development of the Whitney Project and the ongoing exploration programs in Peru and Canada. It focuses on the initial evaluation of exploration/development projects with the main projects being the La Arena copper-gold sulfide project in Peru and the Fenn-Gib gold project in Canada.

Receive News & Ratings for Silver Wheaton Corp Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Silver Wheaton Corp and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply