Q: Looking to start a position in Gold streaming - is WPM the best choice - could you provide the pros and cons of this. What are the other possible companies in this space and their brief pros and cons.
Thanks
Thanks
5i Research Answer:
We would see WPM as one of the largest and the best. Pros: Management, asset mix, growing dividend, very strong balance sheet (net cash), good cash flow and strong expected earnings growth (40% or so), the sector is strong. Cons: valuation (royalty companies are always more expensive as they do not take on production/cost risk), low dividend, some cyclicality, some royalties are not yet producing cash flow for it. Other royalty names include: FNV (we like it a lot and it has many of the same qualities as WPM), OR, TFPM, SSL, ALS, RGLD. Pros are largely similar (with management differences and asset mixes different), cons are smaller sizes and some have less robust balance sheets.