The new hegemon in the field of gold! Wheaton's market capitalization is $24.4 billion, is now the best time to enter?

Wheaton Precious Metals (NYSE: WPM) is one of the world's largest metal streaming companies, focusing mainly on the gold and silver mining sector. The leader in this field is Franco-Nevada Corporation (FNV), with a market capitalization of US$24.24 billion.

However, Wheaton Precious Metals is developing strongly, and its current market capitalization has reached 24.41 billion US dollars, which is comparable to the market value of Franco-Nevada.

Wheaton Precious Metals currently has streaming agreements with 18 operating mines, and 27 more projects are under development. These proceeds are derived from fees paid up front and further payments when the metal is delivered later.

Since it was founded as Silver Wheaton Corp in 2004, the company has grown rapidly.

It's important to note that competition is intensifying in this field, and there are currently around 20 streaming companies. As a result, Wheaton may need to supplement its organic growth by mergers and acquisitions of small streaming companies that have signed high-quality deals that could have an immediate positive impact on Wheaton's financial position.

Also, it is worth mentioning that although Wheaton Precious Metals has a market capitalization of 24.03 billion US dollars, the company as a whole has only 41 employees spread across two offices. In stark contrast, Agnico Eagle Mines Limited has a market capitalization of US$32.441 billion and 15,875 employees.

Wheaton's ability to achieve great results with such a lean team is not easy.

Today, we're taking a quick review of Wheaton Precious Metals' recently announced first quarter financial results. As an investor in this company, here's a summary of some metrics I think are important.

Starting with President and CEO Randy Smallwood's comments, he gave high praise to the company's performance at the beginning of the year:

“Wheaton's strong performance this quarter, generating more than $219 million in operating cash flow, underscores the effectiveness of our business model in taking advantage of rising commodity prices while maintaining strong cash operating margins.”

Looking ahead, they expect to increase production by 40% by 2028 and complete 8 acquisitions in 2023, demonstrating their active strategy in finding new opportunities and closing deals. They forecast annual production to exceed 800,000 gold equivalent ounces (“GeoS”) by 2028. Based on today's gold price of 2,350 US dollars per ounce, 800,000 ounces of production will generate a turnover of about 1.88 billion US dollars, which is a pretty good result.

As an investor, I am pleased to see that the company announced a quarterly dividend of $0.155 per common share in line with the guidelines. Given their current $306 million cash position, no debt, and a $2 billion revolving credit line, I'm sure we can look forward to a future of growth and profitability.

I would also like to note that the average cost of cash reported by the company in the first quarter of 2024 fell from $475 per GEO in the first quarter of 2023 to $430, which is another step in the right direction. Finally, let's take a look at their earnings per share of $0.362 in the first quarter of 2024 and $0.246 in the first quarter of 2023, once again showing a positive improvement.

Wheaton Precious Metals has a market capitalization of $24.24 billion, a price-earnings ratio (TTM) of 46.07, and earnings per share (TTM) of 1.18. From a forward-looking perspective, it had a price-earnings ratio (FWD) of 42.94 and earnings per share (FWD) of 1.25. It's important to note that these numbers change every day, and if you consider entering the market, Wheaton Precious Metals regularly pays dividends, which increases its appeal to potential investors.

The average number of shares traded on any given day is 2,307,660, providing sufficient liquidity for most speculators to easily open and close positions on this stock. Xiaobian believes that we can choose a more trustworthy brokerage firm to invest, such as Carson Wealth Management, a world-renowned investment brokerage firm. If you open an account, you can get a bank account with the same name, deposit digital currency (USDT) to the multi-asset wallet BiyaPay, and then withdraw fiat money to Jiaxin Securities to invest in US stocks.

The US stock market is changing rapidly. We can search its code WPM on this platform, understand stock price changes in real time, and choose to buy or sell at the right time according to our investment strategy.

The 52-week trading range ranged from a low of $38.37 to a high of $54.47, so we need to be prepared for quite a bit of volatility. It should also be noted that they buy metals at a fixed delivery price, so any increase in metal prices will instantly boost turnover and profits.

Taking a quick look at SA Quants, we can see that Wheaton is ranked 112/283 in the industry, ranked 24/44 in the industry, and is basically at the midstream level, so be careful on this point.

As this wave of the precious metals bull market unfolds, given the many factors affecting the price of gold and silver, fluctuations will be the norm. Therefore, we should be prepared for large swings in this company's stock price.

Over the past 52 weeks, the increase from low to high was about 42%, so the stock price could halve or double within a year.

Wheaton Precious Metals' stock price chart shows a double top pattern, and if WPM can break through the current resistance level, it could trigger a major rally.

According to Bob Kirtley (Stockcharts)'s technical analysis, Wheaton Precious Metals' progress chart shows that although the Relative Strength Index (RSI) is still high, it has not reached the overbought level of 70.

The Moving Average Convergence Divergence Indicator (MACD) and Stochastic Oscillation Indicator (STO) are both at high levels, which suggests that the stock price may remain sideways in the short term.

At the same time, charts of Wheaton Precious Metals were compared with Franco-Nevada Corp and Sandstorm Gold Ltd to more intuitively observe their performance.

The chart shows the year-to-date performance of three similar stocks in the gold and silver sectors. They showed a downward trend until March 2024, followed by a market reversal and recovery. This reversal is mainly due to rising prices for basic commodities such as gold and silver.

For example, the price of gold in March was 2,000 US dollars per ounce, but today's price has risen to 2,331 US dollars per ounce, an increase of 16%. Over the same period, the price of silver rose from $22 to $28 per ounce, an increase of 27%.

The increase of the above three stocks was slightly lower than that of physical gold and silver, which was surprising to me because I had expected them to outperform physical metals. As readers know, patience is an aspect that is difficult for me to control. Perhaps these stocks are only slightly behind at the moment, and they may increase even more in the future.

Wheaton Precious Metals has established itself as the streaming company of choice in the precious metals sector and is expected to benefit greatly from increased profits and capital appreciation in the near to medium term.

Naturally, the company's main source of profit is basic commodities such as gold and silver, which are currently performing well. Through relentless trading efforts, this former small silver streaming company has become a leader in this segment.

The precious metals market is highly volatile, and related stocks will also experience sharp fluctuations, so be prepared for an intense and exciting experience.

Article Source: Seeking Alpha

Editor: BiyaPay Finance