PAAS vs. AG: Which Silver Mining Stock Should You Bet On?

First Majestic Silver Corp. AG and Pan American Silver Corp. PAAS are well-known names operating in the Zacks Mining - Silver industry. Both are headquartered in Vancouver, Canada, and provide investors with exposure to silver and gold. Both companies have been benefiting from strength across the silver and gold mining sectors, supported by higher metal prices and sustained investments in expanding production capacity in recent years.

Silver has benefited from resilient industrial demand and mounting supply deficits. Demand for solar energy, electronics and electrification currently accounts for more than half of global silver demand. In this backdrop, let’s take a closer look at both the companies’ fundamentals, growth prospects and challenges.

The Case for First Majestic Silver

First Majestic has four major operating mines in Mexico, which are Santa Elena Silver/Gold mine, Los Gatos Silver mine, San Dimas Silver/Gold mine and La Encantada Silver mine. Despite the persistence of major tax-related issues in Mexico, AG is performing strongly, achieving record production across these sites. In fourth-quarter 2025, Santa Elena, Los Gatos, San Dimas and La Encantada mines contributed 29.1%, 26.7%, 31.2% and 12.8%, respectively, to AG’s total silver-equivalent ounces production.

AG’s total production reached 7.8 million silver-equivalent (AgEq) ounces in the fourth quarter. The figure encompasses a record 4.2 million silver ounces and 41,417 gold ounces. It also includes 14.2 million pounds of zinc, 8.1 million pounds of lead and 235,886 pounds of copper. The AgEq ounces produced reflected strong 37% year-over-year growth, supported by a 77% surge in silver production.

In January 2025, First Majestic completed the acquisition of Gatos Silver, Inc., thereby gaining a 70% interest in the high-quality, long-life Cerro Los Gatos Silver underground mine and solidifying its position as an intermediate primary silver producer.

Also, the company generated a record quarterly free cash flow in the fourth quarter. The company’s cash flow increased 153% compared with the prior quarter to $250.4 million, with cash equivalents reaching $793.4 million. AG reported a record working capital of $733.6 million. Also, it recently increased its quarterly dividend target from 1% to 2% of net quarterly revenues.

The Case for Pan American Silver

PAAS’ fourth-quarter silver production reached 7.3 million ounces, up 20.9% compared with the output from the same period last year. Considering strong performance from its stake in the Juanicipio mine, Pan American Silver has provided a strong silver production outlook for 2026 at 25-27 million ounces, up from 22.8 million ounces produced in 2025.

However, gold production for the fourth quarter was 197.8 thousand ounces. It was lower than the 224.2 thousand ounces produced in the year-ago quarter. PAAS expects its gold production for 2026 at 700-750 thousand ounces (725 thousand ounces), indicating a decline from the 742.2 thousand ounces registered in 2025, reflecting the lower contribution from the Dolores and Minera Florida mines and divestment of La Arena mine.

Silver Segment All-in Sustaining Costs (AISC) per silver ounce were $9.51 in the fourth quarter of 2025, lower than $19.88 in the year-ago quarter. However, Gold Segment AISC was $1,699 per ounce, higher than $1,521 per ounce in the year-ago quarter.

A free cash flow of record $553 million in the fourth quarter of 2025 pushed Pan American Silver’s cash and short-term investments balance to $1.3 billion. This excludes the additional $127 million of cash generated from PAAS' 44% interest at Juanicipio post the MAG Silver acquisition. Exiting the fourth quarter of 2025, the company had working capital of $1.38 billion and $750 million available under its credit facility.

Backed by a strong cash flow generation, PAAS recently increased its quarterly dividend by 29% to 18 cents from the prior payment of 14 cents.

How Do Estimates Compare for AG & PAAS?

The Zacks Consensus Estimate for First Majestic’s earnings for 2026 is pegged at 60 cents per share, indicating an improvement of 30.4% year over year. The 2027 estimate of $1.12 implies growth of 85.3%. The estimates for both 2026 and 2027 have been trending north over the past 60 days.

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The Zacks Consensus Estimate for Pan American Silver’s 2026 earnings is pinned at $3.86 per share, indicating year-over-year growth of 52%. Earnings estimates of $4.26 for 2027 indicate a rise of 10.3%. The estimates for both 2026 and 2027 have been trending north over the past 60 days.

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AG & PAAS: Price Performance, Valuation & Other Comparisons

In the past three months, AG stock has surged 104.2%, outperforming the industry’s growth of 50.8%. Meanwhile, PAAS has gained 47.9%.

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AG is currently trading at a forward 12-month price-to-sales (P/S) multiple of 13.07X, higher than its five-year median. PAAS is currently trading at a forward 12-month P/S multiple of 5.93X, higher than its five-year median.

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Final Take

First Majestic remains well-positioned for growth in the quarters ahead, supported by persistent strength across its major operating mines in Mexico. Combined with a solid balance sheet and favorable precious-metals market conditions, these factors position AG to deliver sustainable growth and improved financial performance in the quarters ahead.

In contrast, while Pan American Silver delivered strong silver production, near-term challenges remain. Rising AISC, particularly for the gold segment, along with production challenges at Dolores and Minera Florida mines, remain key overhangs that could affect performance going forward.

AG currently sports a Zacks Rank #1 (Strong Buy), while PAAS carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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