Entering text into the input field will update the search result below

Digging For Dividends Pt. 1: Pan American Silver Corporation

DGI Journeyman profile picture
DGI Journeyman


  • Pan American Silver is a world-class operator which boasts superb operational metrics and a pristine balance sheet.
  • The company's "Navidad" deposit adds a 'lottery ticket'-like element to the investment thesis.
  • Investors should wait until after the May 10th earnings call before coming to a final decision about whether or not to invest in Pan-American.

As a dividend growth investor, I tend to focus on safe, reliable companies that have a track record of steadily raising their dividends. On the other hand, focusing solely on these companies can leave investors underexposed to certain sectors of the equity markets. One of these sectors is the mining sector. Over the next few weeks, I will analyze a handful of both precious and non-precious metal mining companies. These companies will all be dividend payers, but not necessarily of the sort that dividend growth investors tend to include in their portfolios.

Why Look At Mining Companies?

Investors who are putting money to work in dividend growth stocks are, in many cases, doing so at record high valuations. Mining stocks, on the other hand, are still in the process of recovering from the drastic decline in commodity prices that occurred in 2015-2016. This can be reflected by the performance of an ETF that tracks a basket of non-precious metal stocks relative to that of the S&P 500 or that of a diversified dividend ETF over the past 5 years.

ChartPICK data by YCharts

In addition to trading at less lofty prices on a relative basis, mining companies may be on the cusp of finally benefiting from increasing inflation. In the aftermath of the most recent meeting of the Federal Reserve, the US central bank noted that "Inflation ... is expected to run near the Fed's symmetric 2% objective over the medium term". This is after nearly a decade in which both central bankers and policymakers "threw the kitchen sink" at the US economy in an attempt to engender just such inflation, and the economic expansion which it typically accompanies.

If inflation does indeed take hold of the US and world economy, it is possible --albeit unlikely-- that nonprecious metals could be in for

ChartBase Metal

ChartGold Price in US Dollars data by YCharts

ChartPAAS Dividend Yield (TTM) data by YCharts

This article was written by

DGI Journeyman profile picture
Indiviudal investor building a dividend income portfolio in order to achieve a personal goal of financial security both now and in the future. Looking to share my portfolio research with and receive feedback from the SA community. Enjoys action movies, pizza, long walks on the beach, and dividend increases.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.