Critical Comparison: Alliance Resource Partners, L.P. (ARLP) vs. Peabody Energy (BTUUQ)
Alliance Resource Partners, L.P. (NASDAQ: ARLP) and Peabody Energy (OTCMKTS:BTUUQ) are both oils/energy companies, but which is the better business? We will compare the two companies based on the strength of their dividends, institutional ownership, profitabiliy, earnings, analyst recommendations, valuation and risk.
Alliance Resource Partners, L.P. pays an annual dividend of $1.75 per share and has a dividend yield of 9.0%. Peabody Energy does not pay a dividend. Alliance Resource Partners, L.P. pays out 42.2% of its earnings in the form of a dividend.
Institutional and Insider Ownership
26.4% of Alliance Resource Partners, L.P. shares are held by institutional investors. Comparatively, 0.0% of Peabody Energy shares are held by institutional investors. 44.0% of Alliance Resource Partners, L.P. shares are held by insiders. Comparatively, 1.3% of Peabody Energy shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares Alliance Resource Partners, L.P. and Peabody Energy’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Alliance Resource Partners, L.P.||$1.98 billion||0.73||$739.43 million||$4.15||4.70|
Alliance Resource Partners, L.P. has higher revenue and earnings than Peabody Energy. Peabody Energy is trading at a lower price-to-earnings ratio than Alliance Resource Partners, L.P., indicating that it is currently the more affordable of the two stocks.
This table compares Alliance Resource Partners, L.P. and Peabody Energy’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Alliance Resource Partners, L.P.||20.05%||37.37%||17.63%|
Risk and Volatility
Alliance Resource Partners, L.P. has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500. Comparatively, Peabody Energy has a beta of -2.55, suggesting that its stock price is 355% less volatile than the S&P 500.
This is a breakdown of current ratings and recommmendations for Alliance Resource Partners, L.P. and Peabody Energy, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Alliance Resource Partners, L.P.||0||1||3||0||2.75|
Alliance Resource Partners, L.P. presently has a consensus price target of $27.75, suggesting a potential upside of 42.31%. Peabody Energy has a consensus price target of $33.00, suggesting a potential upside of 8,516.19%. Given Peabody Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Peabody Energy is more favorable than Alliance Resource Partners, L.P..
Alliance Resource Partners, L.P. beats Peabody Energy on 10 of the 13 factors compared between the two stocks.
Alliance Resource Partners, L.P. Company Profile
Alliance Resource Partners, L.P. is a producer and marketer of coal primarily to the United States utilities and industrial users. The Company operates through segments, including Illinois Basin, Appalachia, and Other and Corporate. The Illinois Basin segment consists of various operating segments, including Webster County Coal, LLC’s Dotiki mining complex, Gibson County Coal, LLC’s mining complex, which includes the Gibson North mine and Gibson South mine, Hopkins County Coal, LLC’s mining complex, which includes the Elk Creek mine, the Pleasant View surface mineable reserves and the Fies property, White County Coal, LLC’s, Pattiki mining complex, Warrior Coal, LLC’s mining complex, Sebree Mining, LLC’s mining complex, which includes the Onton mine and River View Coal, LLC mining complex. The Appalachia segment consists of multiple operating segments, including the Mettiki mining complex, the Tunnel Ridge mining complex and the MC Mining mining complex.
Peabody Energy Company Profile
Peabody Energy Corporation is a coal company, which is engaged in the mining of thermal coal for sale primarily to electric utilities and metallurgical coal for sale to industrial customers. Its mining operations are located in the United States and Australia. Its segments are Powder River Basin Mining, Midwestern U.S. Mining, Western U.S. Mining, Australian Metallurgical Mining, Australian Thermal Mining, Trading and Brokerage, and Corporate and Other. It also markets and brokers coal from other coal producers, both as principal and agent, and trades coal and freight-related contracts through trading and business offices in Australia, China, Germany, India, Indonesia, the United Kingdom and the United States. Its other energy-related commercial activities include participating in operations of a mine-mouth coal-fueled generating plant, managing its coal reserve and real estate holdings, evaluating Btu Conversion projects and supporting the development of clean coal technologies.
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