The Canadian mining company has improved its balance sheets and has significant liquidity that could lead to acquisitions, Barclays said in an analyst note.
Silver Wheaton "has a high quality stream portfolio that can grow annual earnings and cash flows organically at spot commodity prices," analysts added.
The company's earnings per share are expected to grow 3.7% annually over the next five years, making it an attractive option despite the overall weaker mining industry.
Silver Wheaton is facing a reassessment from the Canada Revenue Agency, which is investigating the company's 2005 to 2010 taxes.
The company may face up to $1.1 billion in charges, but the stock may not see substantial downside from the reassessment, analysts noted.
Separately, TheStreet Ratings team rates SILVER WHEATON CORP as a Hold with a ratings score of C-. TheStreet Ratings Team has this to say about their recommendation:
We rate SILVER WHEATON CORP (SLW) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, feeble growth in the company's earnings per share and disappointing return on equity.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth greatly exceeded the industry average of 46.5%. Since the same quarter one year prior, revenues rose by 10.7%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- SLW's debt-to-equity ratio is very low at 0.16 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 4.08, which clearly demonstrates the ability to cover short-term cash needs.
- The gross profit margin for SILVER WHEATON CORP is currently very high, coming in at 70.93%. Regardless of SLW's high profit margin, it has managed to decrease from the same period last year.
- Despite any intermediate fluctuations, we have only bad news to report on this stock's performance over the last year: it has tumbled by 28.38%, worse than the S&P 500's performance. Consistent with the plunge in the stock price, the company's earnings per share are down 27.77% compared to the year-earlier quarter. Although its share price is down sharply from a year ago, do not assume that it can now be tagged as cheap and attractive. The reality is that, based on its current price in relation to its earnings, SLW is still more expensive than most of the other companies in its industry.
- SILVER WHEATON CORP's earnings per share declined by 27.8% in the most recent quarter compared to the same quarter a year ago. Earnings per share have declined over the last two years. We anticipate that this should continue in the coming year. During the past fiscal year, SILVER WHEATON CORP reported lower earnings of $0.55 versus $1.05 in the prior year. For the next year, the market is expecting a contraction of 5.5% in earnings ($0.52 versus $0.55).
- You can view the full analysis from the report here: SLW