Why Analysts Love Wheaton Precious Metals the Most

Analysts’ ratings for WPM

Among the major gold mining and gold streaming companies, Wheaton Precious Metals (WPM), the world’s largest precious metals streaming company, has received the highest percentage of “buy” recommendations at 100%. That level hasn’t changed much over the past year.

Why Analysts Love Wheaton Precious Metals the Most

Distinct business model

Wheaton Precious Metals, previously known as Silver Wheaton (SLW), is a royalty and streaming company. Unlike their mining peers (GDX), royalty and streaming companies don’t own mines. They provide up-front funds to precious metal mining companies in exchange for the right to buy their product streams at lower prices in the future.

According to the consensus compiled by Thomson Reuters, 11 Wall Street analysts are currently covering Wheaton Precious Metals. In contrast to WPM’s 100% “buy” ratings, its close peers Franco-Nevada (FNV) and Royal Gold (RGLD) have “buy” recommendations from 20% and 69% of analysts, respectively.

Future development potential

WPM stock has fallen 23.5% as of September 21. But analysts are still optimistic about the future development projects it’s financing. Wheaton Precious Metals’ last two streaming deals should help it diversify further from silver.

In June, Wheaton announced a cobalt stream from Vale SA (VALE). In July, it announced deals to acquire gold and palladium streams from Sibanye Gold (SBGL). The company estimates that production from these projects could lead to production growth of more than 45% between 2017 and 2021. It also has quality assets in safe jurisdictions and a manageable debt level.