Silver Wheaton scores a triple with dividend boost

Silver Wheaton‘s (SLW-T, SLW-N) shareholders have something to be happy about: The company has just tripled its dividend after doubling revenue and operating cash flow for the third quarter. 

The company’s new dividend policy links quarterly dividend payments to the previous period’s operating cash flows. Based on this policy, it has set the fourth quarterly cash dividend at US9¢ per share. This equals 20% of the operating cash flow in the third quarter divided by the company’s outstanding shares at the time the dividend was approved. 

“Our new policy allows us to return a meaningful portion of our cash flows to our shareholders, with the current quarterly dividend tripling previous levels,” Randy Smallwood, the company’s president and CEO, said in a statement.

The company’s shareholders received US3¢ per share during the third period, and those on record as of Nov. 23 will receive the new payment on Dec. 5. 

Before revealing its new policy on Nov. 9, the company released its third-quarter results earlier in the day. 

For the three months ending Sept. 30, the world’s largest silver-streaming company saw profits climbing 96% to US$135 million, compared to the same period a year ago. Revenue and operating cash flows came at US$185.2 million and US$167.2 million, respectively, both doubling from last year’s third period. 

Cash operating margins also doubled during the quarter to US$32.11 per silver-equivalent oz. 

The company says it delivers one of the highest cash-operating margins in the precious metals industry by keeping cash costs fixed at US$4 for every ounce of silver sold. 

The average cash costs for the third quarter came in at US$4.12 per silver-equivalent oz., compared to US$4.09 in the year-ago period. 

The company produced 6.1 million silver-equivalent oz. for the quarter, slightly higher than the 5.9 million oz. generated in last year’s comparable period. 

It sold 4.8 million oz. silver and 6,300 oz. gold during the period. 

Smallwood noted the company is on track to achieve this year’s production target of 26 million silver-equivalent oz. and 15,000 oz. gold.

Despite the new dividend policy and quarterly results, the company shares closed down 2.6% to $35.85 on 1.7 million shares traded. In New York, Silver Wheaton was off 3% to US$35.05 after 7.8 million shares changed hands.