When inflation rears its head, some investors turn to commodities for stability and preservation of purchasing power. The price of commodities like precious metals can rise with inflation, helping investors find a bedrock when other assets may lag.
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While gold may come to mind first as an inflation hedge, silver deserves a look, too. Like gold, silver is widely used in jewelry, but silver has even more industrial applications than gold, as it can be used in solar panels, electric vehicles and electronics. The silver industry saw record demand in 2022 and 2023, according to the Silver Institute. Demand exceeded supply in 2023 for the third year in a row, and supply is expected to decrease modestly in 2024, leading to the second-largest market deficit in 20 years.
The downside to investing in silver stocks is that the market is much smaller than gold. This can lead to more volatility and less liquidity as stocks trade in smaller numbers. If you’re investing for the long term, however, silver’s industrial prospects make it an appealing option. Just be prepared to weather some price fluctuations over the short term.
Here are five of the best silver stocks of 2024:
| Silver Stocks | Implied Upside* |
| First Majestic Silver Corp. (ticker: AG) | 31% |
| Newmont Corp. (NEM) | 9% |
| Endeavour Silver Corp. (EXK) | 38% |
| Pan American Silver Corp. (PAAS) | 20.3% |
| Wheaton Precious Metals Corp. (WPM) | 3.5% |
*According to Morningstar analysts price targets as of Aug. 8 closing.
First Majestic Silver Corp. (AG)
With a market cap of nearly $1.5 billion, AG is the largest silver stock by market cap. The Canada-based silver mining company owns three mines in Mexico, covering over 443,000 acres. The company focuses on growing production through merger and acquisition transactions as well as research and development. First Majestic Silver’s earnings from mine operations increased from 2022 to 2023. The stock is also liquid, with 8 million shares trading each day on average. Morningstar analysts give AG a fair value estimate of $6.46 per share, which closed at $4.93 on Aug. 8.
Newmont Corp. (NEM)
While best known as a gold miner, Colorado-based Newmont also produces silver, copper, zinc and lead. Less than 3% of its sales from fiscal year 2023 were related to silver, so NEM is far from a pure-play silver stock. Yet Newmont has an impressive balance sheet that helps buffer the company’s returns amid fluctuating gold prices, according to Morningstar equity analyst Jon Mills. The stock has a solid trailing 12-month dividend payout of 2.7%. Its market cap of $54 billion and decent trading volume of 10 million shares per day on average make it a fairly liquid option for investors. Morningstar gives NEM a fair value estimate of $52, which closed at $47.71 on Aug. 8.
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Endeavour Silver Corp. (EXK)
It doesn’t take much capital to invest in Canadian Endeavour Silver Corp. At a little more than $3 per share, it is the lowest priced silver stock on this list. But this doesn’t mean it’s the cheapest in terms of value. The 10-year-old company operates eight mines and precious metal projects in Mexico, Chile and the U.S. It produced 8.7 million silver equivalent ounces in 2023, giving it a silver-to-gold ratio of 80 to 1. EXK ranks in U.S. News & World Report’s Earnings Gainers list. Morningstar gives EXK four stars and a fair market value of $4.32, which closed at $3.13 on Aug. 8.
Pan American Silver Corp. (PAAS)
Pan American Silver Corp. is another strong option for investors who want some income with a trailing 12-month dividend of 2.2%. It has consistently paid dividends for the past 14 years. Its $7.1 billion market cap and 4.3 million average trading volume make it a reliable option as well. PAAS stock ranks in U.S. News & World Report’s Safe(er) Stock list. The company owns silver and gold mines throughout Canada, Mexico, Brazil, Peru, Argentina and Bolivia. The company places an emphasis on human rights and sustainability, producing an annual sustainability report to document its efforts and successes in this area. Morningstar gives PAAS stock a fair value estimate of $22.35, which closed at $18.58 on Aug. 8.
Wheaton Precious Metals Corp. (WPM)
Canadian precious metals streaming company Wheaton Precious Metals is worth considering if you want a lower-risk option for silver exposure. As a precious metals streaming company, it purchases all or some of the production from mines. It currently has agreements with 18 operating mines and 26 development stage projects. It joins PAAS in U.S. News & World Report’s Safe(er) Stock list. Also like PAAS, it emphasizes sustainability through strong environmental, social and governance, or ESG, practices. It produces an annual sustainability report and annual climate change report aligned with the recommendations of the Task Force for Climate-related Financial Disclosures. The stock rose 25% in 2023 and is up more than 13% year to date in 2024. Morningstar gives WPM a fair market value of $56.30, which closed at $54.37 on Aug. 8.
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The 5 Best Silver Stocks of 2024 originally appeared on usnews.com
