Wheaton Precious Metals (WPM · TSX)
Owning the Gold Without Digging It
Wheaton pays mining companies cash upfront for the right to buy a slice of the gold and silver their mines produce, at a low price fixed in the contract, for decades.
Bull case for Wheaton Precious Metals
Costs Fixed by Contract, Revenue Set by the Market
Wheaton's cost per ounce is written into its contracts, so higher metal prices flow largely to profit.
Growth Already Bought And Paid For
Mines it already has deals on are ramping up, driving planned output growth without new spending.
The Partner Big Miners Keep Choosing
Repeat deals with the world's biggest miners keep bringing Wheaton first look at new opportunities.
Bear case for Wheaton Precious Metals
Someone Else Runs The Mines
Wheaton has no control over the mines it depends on, so operating problems hit its income directly.
Exposure to Metal Prices
Revenue comes almost entirely from gold and silver, so falling prices squeeze earnings quickly.
Concentration Risk
A small number of mines and partners still produce most of Wheaton's revenue, concentrating the risk.