Natural Resource Partners (NYSE: NRP) and Alliance Holdings GP, L.P. (NASDAQ:AHGP) are both small-cap oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Profitability

This table compares Natural Resource Partners and Alliance Holdings GP, L.P.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Natural Resource Partners 25.25% 37.73% 4.19%
Alliance Holdings GP, L.P. 10.69% 19.15% 9.62%

Dividends

Natural Resource Partners pays an annual dividend of $1.80 per share and has a dividend yield of 7.2%. Alliance Holdings GP, L.P. pays an annual dividend of $2.92 per share and has a dividend yield of 10.6%. Natural Resource Partners pays out 54.2% of its earnings in the form of a dividend. Alliance Holdings GP, L.P. pays out 84.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

Natural Resource Partners has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500. Comparatively, Alliance Holdings GP, L.P. has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500.

Institutional & Insider Ownership

20.6% of Natural Resource Partners shares are owned by institutional investors. Comparatively, 21.4% of Alliance Holdings GP, L.P. shares are owned by institutional investors. 39.0% of Natural Resource Partners shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Natural Resource Partners and Alliance Holdings GP, L.P., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Natural Resource Partners 0 2 0 0 2.00
Alliance Holdings GP, L.P. 0 0 0 0 N/A

Natural Resource Partners currently has a consensus target price of $30.50, indicating a potential upside of 21.76%. Given Natural Resource Partners’ higher possible upside, equities analysts plainly believe Natural Resource Partners is more favorable than Alliance Holdings GP, L.P..

Earnings and Valuation

This table compares Natural Resource Partners and Alliance Holdings GP, L.P.’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Natural Resource Partners $319.23 million 0.96 $163.28 million $3.32 7.55
Alliance Holdings GP, L.P. $1.94 billion 0.85 $710.69 million $3.46 7.96

Alliance Holdings GP, L.P. has higher revenue and earnings than Natural Resource Partners. Natural Resource Partners is trading at a lower price-to-earnings ratio than Alliance Holdings GP, L.P., indicating that it is currently the more affordable of the two stocks.

Summary

Natural Resource Partners beats Alliance Holdings GP, L.P. on 8 of the 14 factors compared between the two stocks.

About Natural Resource Partners

Natural Resource Partners L.P. owns, operates, manages and leases a portfolio of mineral properties in the United States, including interests in coal, trona and soda ash, construction aggregates and other natural resources. Coal Royalty and Other segment consists primarily of coal royalty and coal related transportation and processing assets. As of December 31, 2016, Soda Ash segment included the Company’s 49% non-controlling equity interest in Ciner Wyoming, a trona ore mining operation and soda ash refinery in the Green River Basin, Wyoming. VantaCore’s operating businesses include Laurel Aggregates, located in Lake Lynn, Pennsylvania; Winn Materials/McIntosh Construction, located in Clarksville, Tennessee; Grand Rivers, located in Grand Rivers, Kentucky, and Southern Aggregates, located near Baton Rouge, Louisiana.

About Alliance Holdings GP, L.P.

Alliance Holdings GP, L.P. (AHGP) is a limited partnership company. The Company owns directly and indirectly the members’ interest in Alliance Resource Management GP, LLC (MGP), the managing general partner of Alliance Resource Partners, L.P. (ARLP). The Company’s segments include Illinois Basin, Appalachia, and Other and Corporate. The Illinois Basin segment consists of mining complexes, including Webster County Coal’s Dotiki mining complex; Gibson County Coal’s mining complex, which includes the Gibson North mine and Gibson South mine; Warrior’s mining complex; River View’s mining complex and the Hamilton mining complex. The Appalachia segment consists of various operating segments, including the Mettiki mining complex, the Tunnel Ridge mining complex and the MC Mining mining complex. The Mettiki mining complex includes Mettiki Coal (WV)’s Mountain View mine and Mettiki Coal’s preparation plant. Other and Corporate segment includes marketing and administrative activities.

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