Pan American Silver Corp. (USA) (PAAS), Silver Standard Resources Inc. (USA) (SSRI), Hecla Mining Company (HL): This Silver Miner Is a Rare Dividend Play

Hecla Mining Company (NYSE:HL) has taken big steps in reducing its spending. The company announced that it cut its 2013 capital expenditures forecast by 13%. At the same time, Hecla Mining Company (NYSE:HL) is cutting its exploration spending by 28% and its pre-development spending by 35%. Hecla Mining Company (NYSE:HL) has had a decent quarter, as silver production rose 64%, due in part to one of the company’s mines, Lucky Friday, returning to production. Hecla Mining Company (NYSE:HL) is one of few silver miners to pay a dividend. However, it currently yields only 0.28%, and there are no signs that this will be boosted in the near future.

Bottom Line

Pan American Silver Corp. (USA) (NASDAQ:PAAS) is a stable dividend play. The company has a lot of cash on its balance sheet and almost no debt, which helps in preserving its dividend. The absence of interest expense is a big advantage in a low silver price environment. I do not think that investors should be scared by write-downs and impairments. When silver prices rebound, the company will test its assets and adjust their value.

Silver is priced under $25 right now, which is less than half the highs achieved in 2011. Typically, you want to get exposure to cyclical industries when prices are depressed rather than when they are elevated.

If you believe that silver prices will rebound, Pan American Silver is a better choice. It’s almost impossible to predict the exact timing of the silver price rebound. The miners’ shares could fluctuate back and forth near current levels for a while. Unlike other silver miners, Pan American Silver would provide a decent income stream, and this is a big advantage.

The article This Silver Miner Is a Rare Dividend Play originally appeared on Fool.com and is written by Vladimir Zernov.

Vladimir Zernov has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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