After first purchasing Silver Wheaton (NYSE:SLW)(TSX:SLW) 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!
Taylor Muckerman has no position in any stocks mentioned. The Motley Fool owns shares of Silver Wheaton. (USA). 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.