Silver (SIN25) is having a moment in 2025. After years of steady gains, May silver futures (SIK25) jumped to a multi-year high of $35.495 per ounce in March, finishing an impressive 18.36% rally in the first quarter alone and even beating gold’s (GCM25) performance over the same period. Rising silver prices have sparked new interest from investors, especially in dividend-paying stocks that can offer both growth and regular income.

In this environment, Pan American Silver Corp (PAAS), one of the world’s largest silver producers, has made news with its $2.1 billion deal to buy MAG Silver Corp. As of May 2025, Pan American has a market value of $8.2 billion and a dividend yield of 1.75%, making it an interesting choice for investors who want to benefit from the ongoing rally in silver.

The question now is clear: Should you buy this dividend-paying silver stock that’s right at the center of the industry’s latest major deal? Let’s take a closer look.

Pan American Silver’s Financial Pulse

Pan American Silver (PAAS) is one of the world’s top silver producers, running mines and developing new projects across the Americas. 

The stock has taken advantage of the positive sentiment in the precious metals market, gaining 6.7% over the past year and increasing by 14.7% so far in 2025. 

Pan American’s forward price-earnings ratio is about 16.7x, which is right in line with the sector average. Its price-earnings growth ratio of 0.48x suggests investors aren’t overpaying for its growth. With a market cap close to $8.2 billion and a 60-month beta of 0.75x, the stock offers a mix of steadiness and room to run in a sector known for its ups and downs.

Pan American had a standout first quarter. Revenue jumped to $773.2 million, up 29% from a year ago, and net earnings came in at $169.3 million, or $0.47 per share, which is a big turnaround from last year’s loss. 

The company generated $240.1 million in operating cash flow before working capital changes, and free cash flow reached $112.6 million, thanks to higher metal prices and lower costs. Pan American’s balance sheet is solid, with $923 million in cash and short-term investments, $1.16 billion in working capital, and $750 million in available credit. Total debt stands at $804.4 million. The company’s sustaining cost for silver production was $13.94 per ounce, showing its focus on running efficient operations.

What’s Driving the Next Chapter for Pan American?

Pan American Silver is stepping into a new phase with its $2.1 billion deal to buy MAG Silver, one of the biggest moves in the silver industry this year. This isn’t just about adding more mines. By taking over MAG’s 44% share of the high-quality, low-cost Juanicipio mine, Pan American is set to boost its silver output and cash flow, while gaining a bigger stake in one of the world’s best silver assets. 

CEO Michael Steinmann has made it clear that with Juanicipio’s growth potential and other ongoing projects, Pan American expects production to pick up in the second half of the year and beyond. The company is also working on improving its other assets, like the Jacobina optimization and the La Colorada Skarn development.

For investors who want steady income, Pan American’s dividend is another plus. The company has declared a $0.10 per share dividend for Q1 2025, payable in June, and has a solid record of regular payouts. With a current yield of about 1.75%, a payout ratio near 21%, and two straight years of dividend increases, Pan American is showing it’s committed to rewarding shareholders while still aiming for growth.

Analyst Ratings and the Road Ahead

Analysts are clearly positive about where Pan American Silver is headed, and their confidence stands out as the company moves forward with its latest plans. All nine analysts who cover the stock rate it as a “Moderate Buy,” showing strong agreement that Pan American is set to benefit from higher silver prices. The average price target is $31.46, which is close to 35% higher than the current price. 

Conclusion 

With silver prices on the rise and Pan American Silver making bold moves to expand its footprint, the company stands out as a top pick for investors seeking both growth and steady dividends. The MAG Silver acquisition adds serious firepower to its portfolio, and a healthy balance sheet backs up its ambitions. Analyst sentiment is solidly positive, with plenty of upside still on the table. If you’re looking for a way to play the silver rally with a company that pays you to wait, Pan American Silver looks like a smart buy right now.