Pan American Silver (TSX:PAAS) - Share price, News & Analysis

Q: What is the Fair Price of PAAS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

PAAS (CA$27.59) is trading above our estimate of [[fair value]] (CA$26.85)

PAAS fundamental analysis
Snowflake Score
Valuation	2/6
Future Growth	3/6
Past Performance	2/6
Financial Health	6/6
Dividends	4/6

PAAS Stock Overview

Rewards

Earnings are forecast to grow 31.75% per year

Risk Analysis

Unstable dividend track record

Profit margins (10.7%) are lower than last year (18.3%)

Pan American Silver Competitors

First Majestic Silver

TSX:FR

CA$2.7b

MAG Silver

TSX:MAG

CA$1.6b

Endeavour Silver

TSX:EDR

CA$820.1m

Fortuna Silver Mines

TSX:FVI

CA$1.2b

Price History & Performance

Summary of all time highs, changes and price drops for Pan American Silver
Historical stock prices
Current Share Price	CA$27.59
52 Week High	CA$38.51
52 Week Low	CA$26.19
Beta	1.16
1 Month Change	-4.50%
3 Month Change	-19.14%
1 Year Change	-20.56%
3 Year Change	62.97%
5 Year Change	26.50%
Change since IPO	3,841.43%

Recent News & Updates

Jun 01

Calculating The Fair Value Of Pan American Silver Corp. (TSE:PAAS)

Does the June share price for Pan American Silver Corp. ( TSE:PAAS ) reflect what it's really worth? Today, we will...

Shareholder Returns

	PAAS	CA Metals and Mining	CA Market
7D	-0.7%	-4.9%	0.3%
1Y	-20.6%	-12.7%	-4.0%

Return vs Industry: PAAS underperformed the Canadian Metals and Mining industry which returned -12.7% over the past year.

Return vs Market: PAAS underperformed the Canadian Market which returned -4% over the past year.

Price Volatility

Is PAAS's price volatile compared to industry and market?
PAAS volatility
PAAS Average Weekly Movement	6.3%
Metals and Mining Industry Average Movement	10.9%
Market Average Movement	10.0%
10% most volatile stocks in CA Market	17.3%
10% least volatile stocks in CA Market	4.4%

Stable Share Price: PAAS is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 6% a week.

Volatility Over Time: PAAS's weekly volatility (6%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1979	7,100	Michael Steinmann	https://www.panamericansilver.com

Pan American Silver Corp., together with its subsidiaries, engages in the exploration, mine development, extraction, processing, refining, and reclamation of silver, gold, zinc, lead, and copper mines in Canada, Mexico, Peru, Argentina, and Bolivia. It holds interests in the La Colorada, Dolores, Huaron, Morococha, Shahuindo, La Arena, Timmins West, Bell Creek, Manantial Espejo, San Vicente, Joaquin, Cap-Oeste Sur Este, and Navidad mines. The company was formerly known as Pan American Minerals Corp. and changed its name to Pan American Silver Corp. in April 1995.

Pan American Silver Fundamentals Summary

How do Pan American Silver's earnings and revenue compare to its market cap?
PAAS fundamental statistics
Market Cap	US$4.44b
Earnings (TTM)	US$181.74m
Revenue (TTM)	US$1.70b

24.8x

P/E Ratio

2.6x

P/S Ratio

Is PAAS overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
PAAS income statement (TTM)
Revenue	US$1.70b
Cost of Revenue	US$1.08b
Gross Profit	US$622.94m
Other Expenses	US$441.20m
Earnings	US$181.74m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	0.86
Gross Margin	36.55%
Net Profit Margin	10.66%
Debt/Equity Ratio	1.3%

How did PAAS perform over the long term?

See historical performance and comparison

Dividends

2.2%

Current Dividend Yield

45%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is PAAS undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
PEG Ratio

Key Valuation Metric

Which metric is best to use when looking at relative valuation for PAAS?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for PAAS. This is calculated by dividing PAAS's market cap by their current preferred multiple.
What is PAAS's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	US$4.44b

PAAS key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	2.5x
Enterprise Value/EBITDA	7.5x
PEG Ratio	0.8x

Price to Earnings Ratio vs Peers

How does PAAS's PE Ratio compare to its peers?

PAAS PE Ratio vs Peers

The above table shows the PE ratio for PAAS vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	1095.9x
FR First Majestic Silver	4165.2x	108.7%	CA$2.7b
MAG MAG Silver	102.1x	73.8%	CA$1.6b
EDR Endeavour Silver	47.5x	58.9%	CA$820.1m
FVI Fortuna Silver Mines	16x	-14.2%	CA$1.2b
PAAS Pan American Silver	24.4x	31.7%	CA$5.7b

Forward PE

Price-To-Earnings vs Peers: PAAS is good value based on its Price-To-Earnings Ratio (24.8x) compared to the peer average (1095.9x).

Price to Earnings Ratio vs Industry

How does PAAS's PE Ratio compare vs other companies in the CA Metals and Mining Industry?

Price-To-Earnings vs Industry: PAAS is expensive based on its Price-To-Earnings Ratio (24.8x) compared to the Canadian Metals and Mining industry average (11x)

Price to Earnings Ratio vs Fair Ratio

What is PAAS's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

PAAS PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	24.8x
Fair PE Ratio	23.9x

Price-To-Earnings vs Fair Ratio: PAAS is expensive based on its Price-To-Earnings Ratio (24.8x) compared to the estimated Fair Price-To-Earnings Ratio (24x).

Share Price vs Fair Value

What is the Fair Price of PAAS when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: PAAS (CA$27.59) is trading above our estimate of fair value (CA$26.85)

Significantly Below Fair Value: PAAS is trading above our estimate of fair value.

Price to Earnings Growth Ratio

PEG Ratio: PAAS is good value based on its PEG Ratio (0.8x)

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Future Growth

How is Pan American Silver forecast to perform in the next 1 to 3 years based on estimates from 9 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

31.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: PAAS's forecast earnings growth (31.7% per year) is above the savings rate (1.6%).

Earnings vs Market: PAAS's earnings (31.7% per year) are forecast to grow faster than the Canadian market (8.2% per year).

High Growth Earnings: PAAS's earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: PAAS's revenue (2.4% per year) is forecast to grow slower than the Canadian market (6.9% per year).

High Growth Revenue: PAAS's revenue (2.4% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: PAAS's Return on Equity is forecast to be low in 3 years time (12.5%).

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Past Performance

How has Pan American Silver performed over the past 5 years?

Past Performance Score

2/6

Past Performance Score 2/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

16.8%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: PAAS has high quality earnings.

Growing Profit Margin: PAAS's current net profit margins (10.7%) are lower than last year (18.3%).

Past Earnings Growth Analysis

Earnings Trend: PAAS's earnings have grown by 16.8% per year over the past 5 years.

Accelerating Growth: PAAS's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PAAS had negative earnings growth (-26.4%) over the past year, making it difficult to compare to the Metals and Mining industry average (-5.8%).

Return on Equity

High ROE: PAAS's Return on Equity (6.8%) is considered low.

Discover strong past performing companies

Financial Health

How is Pan American Silver's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: PAAS's short term assets ($982.6M) exceed its short term liabilities ($362.0M).

Long Term Liabilities: PAAS's short term assets ($982.6M) exceed its long term liabilities ($490.4M).

Debt to Equity History and Analysis

Debt Level: PAAS has more cash than its total debt.

Reducing Debt: PAAS's debt to equity ratio has reduced from 4% to 1.3% over the past 5 years.

Debt Coverage: PAAS's debt is well covered by operating cash flow (1223.2%).

Interest Coverage: PAAS's interest payments on its debt are well covered by EBIT (368x coverage).

Balance Sheet

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Dividend

What is Pan American Silver current dividend yield, its reliability and sustainability?

Dividend Score

3/6

Dividend Score 3/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

2.24%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: PAAS's dividend (2.24%) is higher than the bottom 25% of dividend payers in the Canadian market (2.03%).

High Dividend: PAAS's dividend (2.24%) is low compared to the top 25% of dividend payers in the Canadian market (5.33%).

Stability and Growth of Payments

Stable Dividend: PAAS's dividend payments have been volatile in the past 10 years.

Growing Dividend: PAAS's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonably low payout ratio (45.1%), PAAS's dividend payments are well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (58.1%), PAAS's dividend payments are covered by cash flows.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

6.3yrs

Average management tenure

CEO

Michael Steinmann (55 yo)

7.33yrs

Tenure

US$4,224,553

Compensation

Mr. Michael Steinmann, Ph D., P.Geo., has been the President of Pan American Silver Corp. since February 18, 2015 and its Chief Executive Officer since January 1, 2016. Mr. Steinmann served as Executive Vi...

CEO Compensation Analysis

Compensation vs Market: Michael's total compensation ($USD4.22M) is about average for companies of similar size in the Canadian market ($USD3.62M).

Compensation vs Earnings: Michael's compensation has been consistent with company performance over the past year.

Leadership Team

Experienced Management: PAAS's management team is seasoned and experienced (6.3 years average tenure).

Board Members

Experienced Board: PAAS's board of directors are considered experienced (6.1 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: PAAS insiders have only sold shares in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/06/27 00:00
End of Day Share Price	2022/06/27 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31