by Fred Fuld III
Gold and silver have historically been considered a flight to safety, especially during times of high inflation and economic uncertainty. Silver has outpaced inflation during certain time frames.
One of the advantages of silver over gold is that the metal is less expensive, making it more affordable to smaller investors. In addition, silver has far more commercial and industrial uses than gold.
There are several ways to invest in silver. Here are the primary alternatives.
Silver Bullion
You can buy silver bars and rounds in various sizes and weights. They may be produced by the United States government or by private mints. They are easily identifiable and fairly convenient to purchase though coin shops or online gold and silver dealers. You obviously have to be concerned about storage safety do to the potential for theft.
Junk Silver
Junk silver refers to U.S. dimes, quarters, and half dollars minted in 1964 or early, which ere made with 90% silver. These coins have little to no numismatic value, making them a reasonable and simple way of accumulating silver at a reasonable price. Junk silver is available from numerous coin and bullion dealers.
Silver ETF
If you want to invest in silver directly without taking physical ownership, the best way is though a silver exchange traded fund, such as the iShares Silver Trust (SLV). This ETF can be bought and sold just like any stock, without having to worry about storage.
Silver Stocks
There are several companies that specialize in primarily mining for silver. Most of these are Canadian companies, and three of them pay dividends.
First Majestic Silver Corp. (AG), which trades on the NYSE, has a market capitalization of $2.43 billion. The stock has a high trailing price to earnings ratio of 67.7 but a forward P/E ratio of 18.6. Earnings per share for next year are expected to be up 218.8%. The stock pays a small dividend of 0.21%.
Pan American Silver (PAAS) trades on NASDAQ. It has mines in mines in Canada, Mexico, Peru, Argentina, and Bolivia. This $5.24 billion market cap stock trades at 52.6 times trailing earnings and 18.8 times forward earnings. Estimated earnings per share for next year are expected to increase by 35.96%. The company pays a decent dividend yield of 1.97%.
Silvercorp Metals (SVM) is a smaller company, with a market cap of $524.5 million. The company’s mining properties are in China and Mexico. The company has several mines in Mexico, and interests in one mine in Canada. The stock has a very favorable trailing P/E ratio of 15.5, and an a better forward P/E of 10. Just this year, earnings per share jumped by 33%. The dividend for this stock is 1.97%.
Silver Mining ETFs
A diversified way to invest in silver mining companies is through an ETF. The most popular are Global X Silver Miners ETF (SIL), ETFMG Prime Junior Silver Miners ETF (SILJ), and iShares MSCI Global Silver and Metals Miners ETF (SLVP).
Maybe one of these investments may give you a sterling portfolio.
Disclosure: Author didn’t own any of the above at the time the article was written.