Wheaton Precious Metals (NYSE: WPM) is the world's largest precious metals streaming and royalty company. Yet, the stock has not just lagged peers Franco-Nevada (FNV 1.39%) and Royal Gold (RGLD 2.45%) in the past five years, but lost investors money during the period, unlike the other two stocks.

As an investor, though, you may have heard how past performance doesn't guarantee or predict future results. Because Wheaton Precious Metals wasn't a great stock in the past doesn't mean it can never be. In fact, Wheaton isn't the same company that you knew five, or even two, years ago. Management has, perhaps, realized the importance of shareholder returns, which is why it is taking a page out of Franco-Nevada's and Royal Gold's playbook and changing Wheaton's product mix dramatically to boost returns.

A road sign pointing to millionaire with the words "millionaire next exit."

Could Wheaton Precious Metals' stock turn your thousands into millions? Image source: Getty Images.

The transformation is meaningful, one that has the potential to propel Wheaton shares higher and reward shareholders with much stronger returns than in the past -- something that the market appears to be overlooking, but you shouldn't.

The simple reason why Wheaton fell behind

The growth in Royal Gold's and Franco-Nevada's top and bottom lines in the past five years can put Wheaton's lackluster performance to shame.

It's not that Wheaton isn't utilizing its assets or capital resources efficiently. In fact, all three companies are generating strikingly similar returns on assets and invested capital of around 3% each. The problem lies elsewhere.

WPM Revenue (TTM) Chart

WPM revenue (TTM) data by YCharts.

Gold has historically outperformed silver, and 2017 was no different: While gold prices are up almost so far, silver notched up only about 3% gains. If you go back five years, silver prices have crashed 47% while gold has lost 24% in value.

Now correlate the disparate movements between gold and silver prices to the operational performances of the three streaming companies, and you'll spot one common factor between Franco-Nevada and Royal Gold: Both are primarily gold companies. So while Royal Gold gets 85% of its revenue from gold, the yellow metal contributed roughly 67% to Franco-Nevada's revenue in the last quarter. Comparatively, nearly 58% of Wheaton's total production came from silver last year.

To cut a long story short, a larger exposure to gold proved a disadvantage for Wheaton. But that's about to change.

Wheaton's big gold push

During its third quarter, only 48% of Wheaton's total revenue came from silver. While the quarter was unusually skewed toward gold, Wheaton is striving hard to rebalance its silver-to-gold mix in the long run, which is why it paid $800 million to mining giant Vale (VALE -0.30%) in 2016 to acquire the right to purchase an additional 25% of the gold produced from Vale's Brazil-based Salobo mine over and above the 50% production it already had an agreement on.

As you may know, Wheaton is a streaming and royalty company that doesn't own or operate mines but buys precious metal streams from mining companies such as Vale at low costs in exchange for up-front funding. With access to 75% production from Salobo, Wheaton's gold portfolio has got a huge boost, so much so that it projects gold to make up 45% of its average production between 2017 and 2021.

Two pie charts showing Wheaton Precious Metals' revenue exposure between 2017 and 2021 by metal and geography, respectively.

Image source: Wheaton Precious Metals.

Granted, Wheaton will still lag Royal Gold and Franco-Nevada in terms of exposure to gold, but for Wheaton shareholders, it is a step in the right direction that could boost the company's revenue, profit, and cash flow to a considerable extent. There's no reason why that shouldn't reflect in Wheaton's stock price.

In fact, there's no better stock for precious metals investors to gain leverage to both gold and silver than Wheaton Precious Metals today. 

Foolish takeaway

It's a myth that gold and silver companies can't be millionaire-maker stocks. Just look at Franco-Nevada's run-up in the past decade to see what I mean. I can't say if Wheaton Precious Metals can replicate Franco-Nevada's mind-boggling returns, but I do see strong chances of the stock faring better than in the past and rewarding patient investors for several reasons aside from the ones mentioned above. Now's a good time to consider Wheaton stock as you'll be entering during its early stages of transition from a primarily silver to a more balanced gold-and-silver company.