Motley Fool contributing writer Dan Caplinger explains silver streaming, the unique business model of Silver Wheaton (NYSE:SLW), whereby SLW offers financing to mining companies in return for the right to buy future production of silver at a discount.
In this video, Dan shares how adequately financed potential competitors might pose a threat to Silver Wheaton in the future.
Additionally, Dan reviews the pros and cons of SLW's policy of paying a cash dividend based upon 20% of cash flow.
Lastly, Dan describes how the effects of leverage may make owning Silver Wheaton more volatile than a more traditional alternative, such as investing in shares of iShares Silver Trust (NYSEMKT:SLV).
Fool contributor Dan Caplinger owns shares of Silver Wheaton. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
More from The Motley Fool
The Gold-to-Silver Ratio Just Topped 75: Here Are 3 Silver Stocks to Consider Buying Right Now
These three miners provide the highest leverage to physical silver.
8 Reasons Wheaton Precious Metals Could Be the World's Most Perfect Stock
You'll struggle to find a gold or silver mining stock with better a operating margin than Wheaton.
Better Dividend Stock: Royal Gold, Inc. vs. Silver Wheaton
These sizable streaming companies are both keyed in on dividends, but in very different ways.