Wheaton Precious Metals Corp.
WPM
reported adjusted earnings of 33 cents per share in fourth-quarter 2020, missing the Zacks Consensus Estimate of 34 cents by a whisk. However, the bottom-line figure surged 100.6% year over year.
The company generated revenues of $286 million during the reported quarter, up 28.2% on a year-over-year basis. This upside was driven by a 33% increase in the average realized gold equivalent price, partly offset by a 3% decline in the number of Gold Equivalent Ounces (GEOs) sold. The top line, however, missed the Zacks Consensus Estimate of $309 million.
Wheaton’s gold production was 93,137 ounces, down from the prior-year quarter’s 107,054 ounces. Attributable silver production declined 10.2% year over year to 6,509 ounces, while palladium production also slipped 6.4% year over year to 5,672 ounces. The company sold 147,277 GEOs during the December-end quarter, down from the prior-year quarter’s 152,514 GEOs.
Wheaton Precious Metals Corp. Price, Consensus and EPS Surprise
Wheaton Precious Metals Corp. price-consensus-eps-surprise-chart
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Wheaton Precious Metals Corp. Quote
Prices
In fourth-quarter 2020, average realized gold price was $1,882 per ounce, 27% higher than the year-ago quarter’s figure. Silver prices averaged $24.72 per ounce in the reported quarter, up 42.4% year over year. Palladium prices jumped 30.1% year over year to $2,348 per ounce.
Financial Position
The company had $193 million of cash in hand at the end of 2020, up from $104 million at 2019-end. It recorded an operating cash flow of $765 million in 2020 compared with $502 million in 2019. The company had $195 million outstanding under its revolving credit facility of $2 billion. During the December-end quarter, Wheaton repaid $293 million under the Revolving Facility. At the end of 2020, the company had a net debt of $2 million compared to $770 million at 2019-end.
In the fourth quarter, the company announced a quarterly dividend of 13 cents per share, reflecting an increase of 30% from 2019.
2020 Results
Wheaton reported adjusted earnings per share of $1.12 for 2020 compared with 54 cents reported in the prior year. Earnings beat the Zacks Consensus Estimate of $1.11 per share. Sales were up 27.3% year over year to $1 billion. However, the top line missed the Zacks Consensus Estimate of $1.12 billion.
Guidance
Wheaton’s attributable production is estimated between 720,000 GEOs and 780,000 GEOs for the current year. Gold production is expected in a band of 370,000-400,000 ounces. Silver production is expected between 22.5 million ounces and 24 million ounces, while production of other metals is anticipated in a band of 40,000-45,000 GEOs.
Business Updates
On Nov 5, Wheaton entered into a precious metals purchase agreement with Aris Gold Corporation to acquire 6.5% of the gold production and 100% of the silver production from the Marmato Project located in Colombia. On Dec 11, the company entered into an agreement with Capstone Mining Corp. to purchase a 50% silver stream from its Cozamin Mine located in Zacatecas, Mexico.
Price Performance
Shares of Wheaton have appreciated 58.3% over the past year compared with the
industry
’s growth of 89.9%.
Zacks Rank & Stocks to Consider
Wheaton currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include
Impala Platinum Holdings Limited
IMPUY
,
Fortescue Metals Group Limited
FSUGY
and
BHP Group
BHP
. All of these stocks sport a Zacks Rank #1 (Strong Buy), at present. You can see
the complete list of today’s Zacks #1 Rank stocks here.
Impala Platinum has an expected earnings growth rate of 195.9% for the current fiscal year. The company’s shares have surged 84% in the past year.
Fortescue has a projected earnings growth rate of 84.3% for the current fiscal year. The company’s shares have soared 182% in a year’s time.
BHP Group has an estimated earnings growth rate of 65.6% for the current fiscal year. The company’s shares have appreciated 75% over the past year.
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