Home > Top 3 undervalued silver stocks to buy before it is too late

Top 3 undervalued silver stocks to buy before it is too late

Silver stocks bring diversification benefits to a portfolio and are a hedge against inflation. Here are three companies to consider: Pan American, Hecla Mining, and Endeavour Silver. 

Precious metals such as gold and silver have underperformed this year, making gold and silver stocks unattractive. However, because of that, companies in the mining sector have had the chance to consolidate their operations and financial position. As such, many of them trade now at attractive valuations.

Here are some silver stocks to consider to diversify your portfolio: Pan American, Hecla Mining, and Endeavour Silver

Pan American

Pan American Silver Corporation is a Canadian company headquartered in Vancouver. Founded in 1979, it employs about 7,000 people and operates various silver, gold, zinc, or lead mines in Canada and other parts of the world, such as Mexico or Argentina.

The stock price underperformed this year as it is down -22.43%, but it trades at an attractive P/E ratio of 20.41 in 2021, estimated to decline to 14.26 by 2025. Moreover, the company's EPS are projected to reach CAD 2.14 by 2025, much higher than the current CAD 1.41.

Finally, the net profit is expected to grow significantly, by more than 50% in the coming two years.

Hecla Mining

Hecla Mining is an American company founded in 1891 that offers unrefined gold and silver bullion bars to precious metals traders. Thus, it is directly exposed to the price of silver, and it has beaten the EPS estimates for the past four consecutive quarters.

The company's annual revenue estimates for the fiscal period ending December 2021 are $821.12, and for the fiscal period ending December 2021 are expected to rise to $849.87 million. Hecla operates with a gross profit margin of 47.29%, much higher than the 30.35% sector median.

Finally, analysts are bullish on the Hecla mining stock price. Out of the 15 analysts covering the stock price, 7 have issued buy ratings and only 1 has issued a sell rating; the rest have neutral ratings.

Endeavour Silver

Endeavour Silver Corporation was founded in 1981 and is headquartered in Vancouver, Canada. The company explores gold and silver deposits, among others, and employs close to 1,500 people.

In the last twelve months, the stock price is up +36.94% as investors try to get exposure to commodity stocks due to rising inflation. Another attractive aspect of this company is the fact that it operates with a gross profit margin of 42.14%, higher than the 30.35% sector median. Also, the return on total assets is more than double the sector median.

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