Q: I hold WPM and have always preferred it as a senior precious metals royalty play as I think it has the largest silver exposure and I expect silver to catch up at some point soon. I'm considering now whether I should split my position between WPM and FNV as recent news suggests Panama may start talks to perhaps re-open the Cobre Panama mine and FNV would likely have alot of extra upside in that case over time if it happens. How do the 2 compare valuation wise against each other, what are your thoughts on both.
5i Research Answer:
We would be very comfortable with either. There have been positive developments in Panama, with the government allowing copper exports. The re-opening of the mine can be considered an 'option' and FNV would likely benefit if a deal can be reached. FNV is 38X earnings, 0.99% dividend, $1.45B cash and growth in the 15% range. WPM 39X, 0.89% $818M cash and 5% growth. We think owning both would work fine.