The recent rally of precious metals that started in 2020 and extends into 2021 has seen silver prices surpass gold’s 24.6% growth in the same period. Silver is valued both as an industrial metal and a precious metal. Many investors use it as a haven in times of economic and stock market uncertainties and as a hedge against inflation. Consequently, silver had a solid run, delivering more than 48% returns, its best since 2010.
Silver is particularly hot right now because of increased interest in combating climate change with green initiatives. The metal finds ample application in modern technologies, being used in rechargeable batteries and solar energy panels. Moreover, silver’s use in5G-infrastructure, artificial intelligence (AI), and electric vehicles is also helping drive strong demand. According to the Silver Institute, about 50% of the world’s silver supply is used for industrial purposes. Now, that lockdown measures are being eased and the manufacturing sector is resuming production this year, silver prices will likely enjoy another spike due to rising demand.
While buying bullion is one strategy for portfolio diversification, another favourite of experts and investors are mining stocks. And in particular – the best silver stocks to buy are those of established or junior mining companies with considerable assets for development and full ownership of their projects.
In the first months of 2021, several mining stock have come to the attention of analysts. In terms of promising silver mining stocks, we must highlight Pan American Silver Corp., First Majestic Silver Corp. and Americas Silver Corporation. All indicators point to these silver stocks likely benefiting directly from the metal’s bull run. But behind the scenes, there are other reasons to consider them as well.
Pan American is the world’s second largest primary silver producer with the largest silver reserve base globally. As such, PAAS engages in the exploration, development, extraction, processing, refining, and reclamation of silver mines in Canada, Mexico, Peru, Argentina, and Bolivia. The company also produces and sells gold, zinc, lead, and copper. This mining stock is a solid Buy not only because of the company’s established foothold but due to maintained low operating costs and strong precious metal prices. In the last year alone, PAAS’ share price gained nearly 63% with analysts expecting current year revenue and EPS to grow 58.8% and 182.6%, respectively.
First Majestic Silver Corp. Is among the best silver stocks to buy right now after it adopted a dividend policy under which it intends to pay quarterly dividends of 1% of its net revenues beginning after the completion of the first quarter of 2021. Given that the company achieved record quarterly revenues of $125.9 million, representing a 30% year-over-year increase, the new policy only highlights the company’s belief in generating strong and sustainable cash flows going forward
Continued strong silver prices and increasing demand for the metal are the driving factors behind the value growth of these silver stocks. As the market shows no signs of slowing down ahead of worries over President-elect Joe Biden’s new $2 trillion stimulus bill, investing in some mining stocks of mid-tier and junior mining companies may seem like a prudent move.