Wheaton Precious Metals (WPM) Shows Strong Return Potential Amid Precious Metals Rally

Wheaton Precious Metals (WPM.TO) has emerged as a standout performer in the precious metals sector, driven by robust production growth, a rising dividend, and strategic investments in high-margin streaming agreements. With its stock price up 44.46% year-to-date (YTD) as of May 2025 and outperforming the S&P/TSX Composite index by a wide margin, investors are taking notice of its compelling risk-reward profile.

Ask Aime: What's behind Wheaton Precious Metals' stellar year-to-date performance?

Stock Performance: Outpacing the Market

WPM’s stock has delivered 53.94% annualized returns over the past year, significantly outperforming the S&P/TSX Composite’s 14.70% gain. This momentum is underpinned by its low-risk business model, which provides exposure to rising gold and silver prices without the operational risks of traditional mining.

Financial Strength and Dividend Growth

The company’s financial health remains a key driver of investor confidence. Wheaton reported $1.1 billion in revenue in 2022, with net income growing to $538 million in 2023. In March 2025, it announced its first-ever quarterly dividend increase, raising the payout to $0.165 per share—a 6.5% boost from the prior quarter. This signals confidence in its cash flow, which has been bolstered by record production and disciplined capital allocation.

Production Growth: Fueling Future Returns

Wheaton’s streaming model allows it to secure discounted access to precious metals from major mines, enabling it to grow production without the capital intensity of mining. In 2024, it produced 633,000 gold-equivalent ounces (GEOs), exceeding its guidance. For 2025, it aims to produce 600,000–670,000 GEOs, with further expansion planned through projects like Montage Koné (gold) and Fenix (copper-gold-cobalt). By 2029, management targets 40% production growth, reaching 870,000 GEOs annually.

CEO Randy Smallwood’s bullish outlook on gold prices—predicting $3,000/oz by year-end 2025—adds to the tailwinds. With central banks and investors increasingly turning to gold as a hedge against inflation and geopolitical risks, Wheaton’s streaming agreements stand to benefit directly from rising commodity prices.

Upcoming Catalyst: Q1 2025 Earnings

Investors will closely watch the May 8, 2025 earnings release, where Wheaton is expected to report $446 million in Q1 revenue and $0.47 EPS, according to consensus estimates. Analysts like Raymond James have raised their price targets to $90, citing confidence in production trends and inventory normalization. A strong showing could further lift the stock, which already trades at a 60x P/E ratio, reflecting optimism about long-term growth.

Risks on the Horizon

Despite its strengths, WPM faces risks. Project delays—such as at Pascua Lama or Navidad—could disrupt production timelines. Additionally, its high valuation may deter some investors, as the stock’s P/E multiple exceeds sector averages. Commodity price volatility and regulatory hurdles in key jurisdictions like the Democratic Republic of Congo (DRC) also pose threats.

Conclusion: A Compelling Long-Term Play

Wheaton Precious Metals’ 10-year track record of dividend growth, low operational risk, and exposure to rising gold prices position it as a compelling investment. With $688 million in net cash, a 40% production growth target by 2029, and a 76% dividend forecast accuracy rate, the company is well-equipped to navigate market challenges.

While valuation multiples and execution risks warrant caution, the stock’s 53.94% annual return and 44.46% YTD performance suggest investors are betting on its long-term potential. Analysts’ bullish consensus—9 "Buy" ratings out of 12—with an average price target of $83.40, underscores this optimism. For investors seeking a leveraged play on precious metals, WPM remains a top pick.

As the May 8 earnings report approaches, the company has the chance to reinforce its status as a leader in the sector—setting the stage for further gains in 2025 and beyond.