Why Investors Should Reconsider WPM: A Comparative Analysis with Franco-Nevada in 2026

The Streaming Model vs. Broader Portfolio Strategy

Wheaton Precious Metals (NYSE: WPM) has built its reputation on a focused streaming business model, which offers investors direct exposure to precious metals through contractual arrangements with mining operators. However, when examining the competitive landscape of precious metals investment vehicles, a broader analysis suggests that diversification may present superior risk-adjusted returns.

The fundamental difference lies in portfolio scope. While WPM concentrates on streaming agreements, Franco-Nevada (NYSE: FNV) operates across a significantly wider asset base—434 total positions spanning royalties, exploration projects, and exposure to complementary commodities including oil and natural gas. This structural distinction carries important implications for long-term investors.

Examining Wheaton’s Streaming Foundation

Wheaton Precious Metals operates by providing capital to mining enterprises through streaming arrangements. Under these agreements, the company receives rights to purchase metals at predetermined rates, typically 15-25% below spot prices. A recent example illustrates this approach: in November, WPM secured rights to 8% of gold production from the Spring Valley project in Nevada through a $670 million investment. This grants purchasing power at 20% of the spot price for the initial 300,000 ounces, with rates adjusting to 22% thereafter.

The company’s current portfolio encompasses 23 active mining operations and 25 projects in development. Production guidance indicates 600,000 to 670,000 gold equivalent ounces (GEOs) in 2025, comprising 59% gold, 39% silver, with minor cobalt and palladium contributions. These volumes should expand to 870,000 GEOs by 2029 and stabilize at approximately 950,000 GEOs annually between 2030 and 2034. The embedded cost structure—approximately $473 per ounce for gold and $5.75 for silver through 2029—enables substantial margin capture during price appreciation cycles.

The Franco-Nevada Advantage: Scale and Diversification

Franco-Nevada’s operational footprint demonstrates the value proposition of diversified precious metals exposure. With 434 assets globally distributed across multiple commodity categories, the company reduces concentration risk inherent in streaming-only strategies. The portfolio includes 120 producing assets, 38 advanced-stage projects, and 376 exploration opportunities.

The composition reveals strategic depth: 418 assets operate under royalty agreements rather than streaming contracts, providing different risk and return characteristics. Precious metals account for 82% of projected GEO production, with exposure to platinum group metals, oil, and natural gas adding portfolio resilience.

Recent capital deployment illustrates Franco-Nevada’s acquisition strategy. The company allocated $1.1 billion for a 7.5% gross margin royalty on the Cote Gold Mine, projected to generate $67 million in annual revenue upon full operation. Production expectations range between 495,000 and 525,000 GEOs through 2029 under current operational assumptions. The Cote project alone represents 175,000 GEOs of incremental capacity, while the potential restart of Cobre Panama production and longer-term projects suggest an additional 225,000 GEOs of medium-to-long-term volume.

Shareholder Returns and Capital Allocation

Both companies demonstrate commitment to returning cash to shareholders while reinvesting in growth. Franco-Nevada’s track record proves particularly compelling: the company has increased its dividend for 18 consecutive years, establishing a pattern of disciplined capital management. This consistency reflects the stability generated by diversified revenue streams.

The cash generation capability from both royalty and streaming agreements funds ongoing acquisitions and dividend growth. Franco-Nevada’s larger asset base generates proportionally greater cash flows, providing greater flexibility in deployment decisions during market cycles.

Risk Considerations and Portfolio Construction

While Wheaton Precious Metals’ streaming model delivers straightforward precious metals exposure, Franco-Nevada’s multi-commodity approach and larger geographic footprint provide enhanced downside protection. When commodity cycles diverge, portfolio resilience becomes increasingly valuable. Franco-Nevada’s 434-asset structure versus WPM’s concentrated streaming portfolio represents a meaningful risk differential for investors with longer time horizons.

The question for 2026 investors is whether focused exposure warrants the concentration premium or whether broader diversification justifies a preference for Franco-Nevada’s business structure.