As the U.S. dollar has continued to strengthen, commodities like precious metals have been under pressure, and this has caused weakness in the stocks of the companies who mine and produce them. Even though this weakness is warranted, I think it has led to a great long-term buying opportunity, so let’s take a closer look at three stocks that you should consider investing in today. All figures are in U.S. dollars.
1. Silver Wheaton Corp.
Silver Wheaton Corp. (TSX:SLW)(NYSE:SLW) is the largest pure precious metals streaming company in the world. At today’s levels, its stock trades at 33.1 times fiscal 2015’s estimated earnings per share of $0.67 and 26.1 times fiscal 2016’s estimated earnings per share of $0.85, the latter of which is inexpensive compared with its five-year average price-to-earnings multiple of 27.4. In addition, the company pays a quarterly dividend of $0.05 per share, or $0.20 per share annually, giving its stock a 0.9% yield.
2. Tahoe Resources Inc.
Tahoe Resources Inc. (TSX:THO) is one of the leading producers of precious metals in the Americas. At current levels, its stock trades at 20.2 times fiscal 2015’s estimated earnings per share of $0.77 and 18.8 times fiscal 2016’s estimated earnings per share of $0.83, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 22.7. Additionally, the company pays a monthly dividend of $0.02 per share, or $0.24 per share annually, which gives its stock a 1.5% yield.
3. Lundin Mining Corporation
Lundin Mining Corporation (TSX:LUN) is a Canada-based mining company with operations in Europe, the Americas, and Africa. At today’s levels, its stock trades at 14.7 times fiscal 2015’s estimated earnings per share of $0.34 and 13.5 times fiscal 2016’s estimated earnings per share of $0.37, both of which are inexpensive compared with its five-year average price-to-earnings multiple of 20.2. Investors should also note that the company does not currently pay dividends, but its increased amount of cash flow from operations, including 21.5% growth to $187.4 million in fiscal 2014 and 711.6% growth to $224 million in the first quarter of fiscal 2015, could allow it to initiate one or announce a special dividend in the very near future.
Which of these inexpensive mining stocks should you buy today?
Silver Wheaton, Tahoe Resources, and Lundin Mining are three very inexpensive investment options in the metals and mining industry today. Foolish investors should strongly consider initiating positions in one of them.
