Westmoreland Coal (NASDAQ: WLB) and Natural Resource Partners (NYSE:NRP) are both small-cap oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations for Westmoreland Coal and Natural Resource Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Westmoreland Coal 0 1 2 0 2.67
Natural Resource Partners 0 2 0 0 2.00

Westmoreland Coal presently has a consensus price target of $10.67, suggesting a potential upside of 405.53%. Natural Resource Partners has a consensus price target of $30.50, suggesting a potential upside of 22.98%. Given Westmoreland Coal’s stronger consensus rating and higher possible upside, research analysts plainly believe Westmoreland Coal is more favorable than Natural Resource Partners.

Profitability

This table compares Westmoreland Coal and Natural Resource Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Westmoreland Coal -7.24% N/A -6.58%
Natural Resource Partners 25.25% 37.73% 4.19%

Dividends

Natural Resource Partners pays an annual dividend of $1.80 per share and has a dividend yield of 7.3%. Westmoreland Coal does not pay a dividend. Natural Resource Partners pays out 54.2% of its earnings in the form of a dividend.

Volatility and Risk

Westmoreland Coal has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, Natural Resource Partners has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500.

Valuation and Earnings

This table compares Westmoreland Coal and Natural Resource Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Westmoreland Coal $1.43 billion 0.03 $231.38 million ($5.54) -0.38
Natural Resource Partners $319.23 million 0.95 $163.28 million $3.32 7.47

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

Insider and Institutional Ownership

78.3% of Westmoreland Coal shares are owned by institutional investors. Comparatively, 20.6% of Natural Resource Partners shares are owned by institutional investors. 1.4% of Westmoreland Coal shares are owned by company insiders. Comparatively, 39.0% of Natural Resource Partners shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Westmoreland Coal beats Natural Resource Partners on 8 of the 15 factors compared between the two stocks.

Westmoreland Coal Company Profile

Westmoreland Coal Company is an energy company. The Company operates through six segments: Coal-U.S., Coal-Canada, Coal-(WMLP), Power, Heritage and Corporate. The Coal-U.S. segment includes the operations of coal mines located in Montana, North Dakota, Ohio, Texas and New Mexico. The Coal-Canada segment includes the operations of coal mines located in Alberta and Saskatchewan. The Coal-WMLP segment includes the operations of Westmoreland Resource Partners, LP, a coal master limited partnership. The Power segment includes its Roanoke Valley Power Facility (ROVA) operations located in North Carolina. The Heritage segment includes the benefits it provides to former mining operation employees, as well as other administrative costs associated with providing those benefits and cost containment efforts. It produces and sells thermal coal primarily to investment grade utility customers under cost-protected contracts, as well as to industrial customers and barbeque briquettes manufacturers.

Natural Resource Partners Company Profile

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.

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