Silver Wheaton Corporation Stock Hold Recommendation Reiterated (SLW)

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

NEW YORK ( TheStreet) -- Silver Wheaton Corporation (NYSE: SLW) has been reiterated by TheStreet Ratings as a hold with a ratings score of C+. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations and expanding profit margins. However, as a counter to these strengths, we find that the stock has had a generally disappointing performance in the past year.

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Highlights from the ratings report include:
  • SLW's revenue growth has slightly outpaced the industry average of 1.3%. Since the same quarter one year prior, revenues slightly increased by 3.1%. 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.
  • Net operating cash flow has slightly increased to $165.61 million or 1.09% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -24.83%.
  • The current debt-to-equity ratio, 0.34, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.07 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. In comparison to the other companies in the Metals & Mining industry and the overall market, SILVER WHEATON CORP's return on equity significantly exceeds that of the industry average and is above that of the S&P 500.
  • Reflecting the weaknesses we have cited, including the decline in the company's earnings per share, SLW has underperformed the S&P 500 Index, declining 15.91% from its price level of one year ago. Turning toward the future, the fact that the stock has come down in price over the past year should not necessarily be interpreted as a negative; it could be one of the factors that may help make the stock attractive down the road. Right now, however, we believe that it is too soon to buy.

Silver Wheaton Corp., together with its subsidiaries, operates as silver and gold streaming company worldwide. The company has 20 long-term purchase agreements associated with silver and gold relating to 23 mining assets. Silver Wheaton has a market cap of $8.2 billion and is part of the basic materials sector and metals & mining industry. The company has a P/E ratio of 14.00, below the S&P 500 P/E ratio of 18.00. Shares are down 36.1% year to date as of the close of trading on Friday.

You can view the full Silver Wheaton Ratings Report or get investment ideas from our investment research center.

--Written by a member of TheStreet Ratings Staff.

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