TSX:PAAS

Stock Analysis Report

Pan American Silver

Executive Summary

Pan American Silver Corp., together with its subsidiaries, engages in the exploration, development, extraction, processing, refining, and reclamation of silver mines.

Rewards

Trading at 19.4% below its fair value

Earnings are forecast to grow 42.67% per year

Risk Analysis

Highly volatile share price over past 3 months

Profit margins (2.3%) are lower than last year (14.7%)

Shareholders have been diluted in the past year



Snowflake Analysis

Reasonable growth potential with adequate balance sheet.


Similar Companies

Share Price & News

How has Pan American Silver's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: PAAS's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

8.4%

PAAS

1.8%

CA Metals and Mining

-0.2%

CA Market


1 Year Return

65.5%

PAAS

26.3%

CA Metals and Mining

9.4%

CA Market

Return vs Industry: PAAS exceeded the Canadian Metals and Mining industry which returned 26.9% over the past year.

Return vs Market: PAAS exceeded the Canadian Market which returned 10.4% over the past year.


Shareholder returns

PAASIndustryMarket
7 Day8.4%1.8%-0.2%
30 Day-0.2%0.9%1.8%
90 Day42.3%10.1%6.3%
1 Year67.1%65.5%27.2%26.3%12.9%9.4%
3 Year25.2%22.1%0.7%-1.2%17.1%6.5%
5 Year115.6%103.0%28.1%23.9%37.3%17.2%

Price Volatility Vs. Market

How volatile is Pan American Silver's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Pan American Silver undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: PAAS (CA$29.43) is trading below our estimate of fair value (CA$36.49)

Significantly Below Fair Value: PAAS is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: PAAS is poor value based on its PE Ratio (165.5x) compared to the Metals and Mining industry average (17.3x).

PE vs Market: PAAS is poor value based on its PE Ratio (165.5x) compared to the Canadian market (15.8x).


Price to Earnings Growth Ratio

PEG Ratio: PAAS is poor value based on its PEG Ratio (3.9x)


Price to Book Ratio

PB vs Industry: PAAS is overvalued based on its PB Ratio (1.9x) compared to the CA Metals and Mining industry average (1.5x).


Next Steps

Future Growth

How is Pan American Silver forecast to perform in the next 1 to 3 years based on estimates from 7 analysts?

45.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PAAS's forecast earnings growth (42.7% per year) is above the savings rate (1.4%).

Earnings vs Market: PAAS's earnings (42.7% per year) are forecast to grow faster than the Canadian market (10.3% per year).

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

Revenue vs Market: PAAS's revenue (14% per year) is forecast to grow faster than the Canadian market (5% per year).

High Growth Revenue: PAAS's revenue (14% 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 (13.2%).


Next Steps

Past Performance

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

65.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: PAAS has high quality earnings.

Growing Profit Margin: PAAS's current net profit margins (2.3%) are lower than last year (14.7%).


Past Earnings Growth Analysis

Earnings Trend: PAAS has become profitable over the past 5 years, growing earnings by 65% per year.

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 (-79.3%) over the past year, making it difficult to compare to the Metals and Mining industry average (-1.4%).


Return on Equity

High ROE: PAAS's Return on Equity (1.1%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Pan American Silver's financial position?


Financial Position Analysis

Short Term Liabilities: PAAS's short term assets ($719.8M) exceed its short term liabilities ($260.5M).

Long Term Liabilities: PAAS's short term assets ($719.8M) do not cover its long term liabilities ($745.4M).


Debt to Equity History and Analysis

Debt Level: PAAS's debt to equity ratio (13.7%) is considered satisfactory.

Reducing Debt: PAAS's debt to equity ratio has increased from 3.3% to 13.7% over the past 5 years.

Debt Coverage: PAAS's debt is well covered by operating cash flow (49%).

Interest Coverage: PAAS earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: PAAS has a high level of physical assets or inventory.

Debt Coverage by Assets: PAAS's debt is covered by short term assets (assets are 2.1x debt).


Next Steps

Dividend

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

0.61%

Current Dividend Yield


Dividend Yield vs Market

company0.6%marketbottom25%1.9%markettop25%5.5%industryaverage1.1%forecastin3Years0.9%

Current dividend yield vs market & industry

Notable Dividend: PAAS's dividend (0.62%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.88%).

High Dividend: PAAS's dividend (0.62%) is low compared to the top 25% of dividend payers in the Canadian market (5.48%).


Stability and Growth of Payments

Stable Dividend: PAAS is not paying a notable dividend for the Canadian market, therefore no need to check if payments are stable.

Growing Dividend: PAAS is not paying a notable dividend for the Canadian market, therefore no need to check if payments are increasing.


Current Payout to Shareholders

Dividend Coverage: PAAS is not paying a notable dividend for the Canadian market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of PAAS's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

What is the CEO of Pan American Silver's salary, the management and board of directors tenure and is there insider trading?

4.2yrs

Average management tenure


CEO

Michael Steinmann (53yo)

4yrs

Tenure

US$3,667,500

Compensation

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


CEO Compensation Analysis

Compensation vs Market: Michael's total compensation ($USD2.81M) is about average for companies of similar size in the Canadian market ($USD2.87M).

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


Management Age and Tenure

4.2yrs

Average Tenure

58yo

Average Age

Experienced Management: PAAS's management team is considered experienced (3.7 years average tenure).


Board Age and Tenure

4.0yrs

Average Tenure

65yo

Average Age

Experienced Board: PAAS's board of directors are considered experienced (4 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellCA$1,075,86115 Aug 19
C. McArthur
EntityIndividual
Role
Member of the Board of Directors
Director
Shares47,480
Max PriceCA$22.66
SellCA$200,35111 Jul 19
Matthew Andrews
EntityIndividual
Shares11,668
Max PriceCA$17.17
BuyCA$27,94001 Jun 19
Gillian Winckler
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,000
Max PriceCA$13.97
BuyCA$2,371,78922 May 19
Ross Beaty
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares170,000
Max PriceCA$13.95
BuyCA$175,55001 Mar 19
Michael Carroll
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares10,000
Max PriceCA$18.20

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 22.2%.


Management Team

  • Steve Busby (59yo)

    Chief Operating Officer

    • Tenure: 11.7yrs
    • Compensation: US$1.94m
  • Wayne Vincent (57yo)

    Vice President of Accounting & Operations

    • Tenure: 4.4yrs
  • Andres Dasso

    Senior Vice President of Mining Operations

    • Compensation: US$1.63m
  • Siren Fisekci

    Vice President of Investor Relations & Corporate Communications

    • Rob Doyle

      Chief Financial Officer

      • Tenure: 16yrs
      • Compensation: US$1.49m
    • Michael Steinmann (53yo)

      President

      • Tenure: 4yrs
      • Compensation: US$3.67m
    • Martin Wafforn (60yo)

      Senior Vice President of Technical Services & Process Optimization

      • Tenure: 3.4yrs
    • Christopher Lemon

      General Counsel

      • Tenure: 2.4yrs
    • George Greer

      Senior Vice President of Project Development

      • Tenure: 8yrs
    • Sean McAleer

      Senior VP & MD of Guatemala

      • Tenure: 0.8yrs
      • Compensation: US$1.33m

    Board Members

    • Chuck Jeannes (61yo)

      Independent Director

      • Tenure: 0.9yrs
    • Walter Segsworth (70yo)

      Lead Independent Director

      • Tenure: 8yrs
      • Compensation: US$174.00k
    • Michael Carroll (66yo)

      Independent Director

      • Tenure: 9yrs
      • Compensation: US$180.50k
    • Neil de Gelder (66yo)

      Independent Director

      • Tenure: 7.5yrs
      • Compensation: US$167.50k
    • Ross Beaty (67yo)

      Independent Chairman

      • Compensation: US$275.00k
    • Michael Steinmann (53yo)

      President

      • Tenure: 4yrs
      • Compensation: US$3.67m
    • C. McArthur (64yo)

      Director

      • Tenure: 0.9yrs
    • Gill Winckler (56yo)

      Independent Director

      • Tenure: 3.7yrs
      • Compensation: US$161.00k

    Company Information

    Pan American Silver Corp.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: Pan American Silver Corp.
    • Ticker: PAAS
    • Exchange: TSX
    • Founded: 1994
    • Industry: Silver
    • Sector: Materials
    • Market Cap: CA$6.330b
    • Shares outstanding: 209.61m
    • Website: https://www.panamericansilver.com

    Number of Employees


    Location

    • Pan American Silver Corp.
    • 625 Howe Street
    • Suite 1440
    • Vancouver
    • British Columbia
    • V6C 2T6
    • Canada

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    PAASNasdaqGS (Nasdaq Global Select)YesCommon SharesUSUSDSep 1982
    PAASTSX (The Toronto Stock Exchange)YesCommon SharesCACADSep 1982
    PA2DB (Deutsche Boerse AG)YesCommon SharesDEEURSep 1982
    0R07LSE (London Stock Exchange)YesCommon SharesGBCADSep 1982
    PAASWX (SIX Swiss Exchange)YesCommon SharesCHCHFSep 1982

    Biography

    Pan American Silver Corp., together with its subsidiaries, engages in the exploration, development, extraction, processing, refining, and reclamation of silver mines. The company owns and operates mines located in Mexico, Peru, Canada, Argentina, and Bolivia. It also produces and sells gold, zinc, lead, and copper. The company holds interests in the La Colorada, Dolores, Huaron, Morococha, La Arena, Shahuindo, San Vicente, Manantial Espejo, and Timmins mines. Pan American Silver Corp. was founded in 1994 and is headquartered in Vancouver, Canada. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/26 00:01
    End of Day Share Price2020/01/24 00:00
    Earnings2019/09/30
    Annual Earnings2018/12/31


    Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.