After first purchasing Silver Wheaton (SLW 1.49%)(SLW 1.81%) in my Real Money Portfolio back in June of this year, it has delivered a minimal return. Though, a couple of dividend payments have been nice. All of this, despite a continued slide in the price of silver.
Why? Because the company continues to deliver on its stated goals, and then some. An expected operating cost of just $4.15 per ounce in 2014 provides management with a bit more wiggle room than its peers with silver trading around $16/oz. Heck, some miners can't even produce an ounce of silver for under $16.
As industrial uses for the precious metal continue to rise -- for solar panels, medical devices, etc... -- demand is likely to help support prices, especially if supply suffers due to high-cost producers exiting the market.
Silver Wheaton's wisely structured contracts that help avoid suffering a dramatic setback if any of its partners falter, and its one-of-a-kind dividend plan provide a relatively wide safety net.
For these reasons, I'm selling June 2015 Put options to add a bit more cash to my portfolio, which I hope to deploy on some, now, undervalued energy companies due to the recent sectorwide pullback. And, with a company like Silver Wheaton, I won't mind owning the shares should they happen to pull back to my strike price (which, I don't believe is likely).
That's all for now. Fool on!
