The silver market has been a study in patience for investors, with its performance trailing behind that of gold, which recently soared to new record highs above the $2,000 per ounce mark. In 2023, while gold futures (GCJ24) climbed by 13.45%, the most active silver futures (SIK24) eked out a mere 0.19% increase - and the disparate price action for the two metals is extending into this year.

Since the start of 2023, the iShares Silver Trust (SLV) has netted a gain of only 1.4%, while the SPDR Gold Shares (GLD) is up nearly 18% for the same period.

However, the silver lining may be closer than it appears. Against the backdrop of record prices for gold, along with rising demand for silver in industrial applications, silver's currently tight trading range could be the precursor to a significant breakout. If silver can surpass looming technical resistance around $26 per ounce, it may trigger a rush of investment that could propel both the metal - and related mining shares - to new heights. 

With this in mind, two silver mining stocks emerge as intriguing prospects, with both companies - tagged with “strong buy” ratings from analysts, and trading under $20 per share - poised to benefit from potential upside in silver prices. For those investors who think silver is undervalued at current levels, these two mining stocks are worth a look.

1. MAG Silver Stock

MAG Silver Corp (MAG) is a mining entity with a sharp focus on silver, primarily engaged in the exploration and development of high-grade projects. Its prowess isn't confined to extraction; it's also actively exploring other promising sites, such as the Deer Trail CRD Project in Utah. 

Turning to MAG's share price performance, the stock has pulled back 18% over the past 52 weeks. However, MAG is up nearly 13% from its 52-week low, set on March 1.

On the fundamental front, MAG Silver transitioned from development to production with the ramp-up of its Juanicipio project, which achieved nameplate capacity in 2023. The site processed 1.27 million tons of mineralized material in 2023, with a sequential uptick from Q3 to Q4. The joint venture with Fresnillo (FNLPF) also produced 16.8 million silver ounces and 36,732 gold ounces during the year.

MAG Silver will report its Q4 earnings on March 25, with the consensus calling for a profit of $0.13 per share. This follows a Q3 earnings report in which MAG fell short of EPS estimates, even as revenue ramped up 151.5% year-over-year to $125.05 million.

Analyst sentiment toward MAG Silver is overwhelmingly positive, with a consensus “Strong Buy” rating. Out of 12 analysts, 7 recommend a “Strong Buy,” 3 suggest a “Moderate Buy,” and 2 maintain a “Hold.” The mean target price is set at $15.36, which represents a substantial upside of roughly 70.5% from current levels. 

2. Pan American Silver Stock

Pan American Silver Corp. (PAAS) is a mining company with a significant presence in the silver industry, known for its operational efficiency and sustainable mining practices. The company operates mines in various countries, including Peru, Mexico, Argentina, and Bolivia, and has recently expanded its portfolio through the acquisition of Yamana Gold. 

PAAS stock is off 12.5% over the past 52 weeks, though the shares have recovered 13.9% since touching a 52-week low in February.

Pan American Silver's most recent earnings, released on Feb. 22, were a mixed bag. The per-share loss of $0.04 fell short of estimates for a profit of $0.08, though revenue for the quarter was $669.6 million, which beat the Street. Looking ahead, analysts are targeting full-year earnings of $0.24 per share for fiscal year 2024, while revenue is projected to rise 10.1% to $2.55 billion. 

The mining company also maintains a commitment to returning value to shareholders via regular dividend payments, which it has increased for the past four years. PAAS pays a quarterly dividend of $0.10 per share, yielding 2.89% at current levels. 

Analysts are upbeat on PAAS, with a consensus “Strong Buy” rating. Based on 9 analysts offering recommendations, 7 suggest a “Strong Buy,” 1 says “Moderate Buy,” and 1 recommends a “Hold.” The mean target price of $20.19 indicates nearly 46% potential upside from current levels.