Will Pan American Silver Help You Retire Rich?http://www.fool.com/retirement/general/2012/09/11/will-pan-american-silver-help-you-retire-rich.aspx Dan Caplinger
September 11, 2012
Now more than ever, a comfortable retirement depends on secure, stable investments. Unfortunately, the right stocks for retirement won't just fall into your lap. In this series, I look at 10 measures to show what makes a great retirement-oriented stock.
When most people think of stocks for retirement, mining companies aren't typically first on the list, given their volatility. But as the past 10 years have shown us, that may be a mistake, as Pan American Silver (Nasdaq: PAAS ) has taken advantage of big spikes in precious metals prices to build its sales and deliver handsome long-term profits to shareholders. But that's changed in the past year, with the company having had its share price cut almost in half. Will Pan American emerge stronger from the experience, or will the silver miner crash and burn? Below, we'll take a look at how Pan American Silver does on our 10-point scale.
The right stocks for retirees
Sure, you still want good returns, but you also need to manage your risk and protect yourself against bear markets, which can maul your finances at the worst possible time. The right stocks combine both of these elements in a single investment.
When scrutinizing a stock, retirees should look for:
With those factors in mind, let's take a closer look at Pan American Silver.
Source: S&P Capital IQ. Total score = number of passes. * 2.5-year growth rate.
With only four points, Pan American Silver doesn't deliver everything that most conservative investors would like to see in a stock. Despite its poor stock performance, though, the miner has some promising things going for it that could boost its results in the future.
The entire silver mining industry has gone through tough times lately. Since silver hit highs around $50 per ounce early last year, bullion prices have plunged, sending the iShares Silver Trust (NYSE: SLV ) down as much as 45% from its highs last year. That exerted pressure on players throughout the industry, with Silver Wheaton (NYSE: SLW ) earning less income from its share of streamed silver from its partners, and Hecla Mining (NYSE: HL