+ Watch ARLP
on My Watchlist
The Company is a producer and marketer of coal to major United States utilities and industrial users.
Solid earnings, Conservative payout, dividend increased every quarter for years...yield circa 7% depending on market wrinkles over many years...A Gold Mine Coal Miner.
ARLP is the ninth largest coal producer in the United States and they have management in place who know how to make smart acquisitions. Earlier this year they made a deal with Green River Collieries to purchase all of their coal related assets in western Kentucky. The purchase includes the Onton 9 mining complex, which produces 2.1 million tons of coal annual and has estimated reserves of 40 millions tons.(http://www.miningnewstoday.net/2012/02/alliance-resource-partners-lp-announces.html#.ULCOgOR3gZk)Currently the price of coal in the Illinois basin (which includes parts of western Kentucky for some reason) is 47.90 per ton (http://www.eia.gov/coal/news_markets/index.cfm)Assuming an incredibly conservative price of 40 dollars for the coal over the life of the mine, ARLP would generate 840 million in revenue each year. Apply their ..176 5 yr avg profit margin and that gives them 14.7 million in profit. If you believe the 40 million ton estimate then the mine can operate for 15-20 years. So with very conservative estimates on the price of Illinois coal you get 14.7 million in profit each year for the next 15-20 years. And how much did our pals at ARLP pay for this opportunity? A measly 100 millions dollars. (http://www.sec.gov/Archives/edgar/data/1086600/000110465912075780/a12-22453_110q.htm#Item5_OtherInformation_090043) Page 7 "4. Acquisition of Business"
There's a lump of coal in my Christmas stocking.I don't care who put it thereits paying 7%
Achieved Capital Gain of 31.8%. Return of Capital (ROC equivalent yield) 6.8%. ROC-Yield on Cost (YOC) 9.1%. This is not a stock, it is a Master Limited Partnership (MLP). Sold position in IRA to avoid possible double taxation from recapture of depreciation (unrelated business income tax - UBIT) when I am retired. See Ken Reel articles on Seeking Alpha for IRS Form 990T reporting of UBIT on MLP's held in IRA’s. Reinvested proceeds in other dividend growth stocks that are listed on my MF score card. Still hold position in Brokerage account and reinvesting ROC. Capital Gain displayed is shown as 31.1%.
The stock is low now
Gamble on coal. I can't really speak for how coal is going to do as a sector -- certainly it's been free falling the last six months. However, ARLP is offering a steadily increasing dividend which is now yielding 7%. Income has been rising, and the payout ratio is < 50%. The balance sheet looks clean: more cash than total current liabilities, and the current ratio > 2. If the sector does recover, ARLP should reap serious benefits. Meanwhile, the yield should provide downward cover in the near term.
high sulfur coal is taking share from other forms of coal. ARLP is almost all high sulfur coal from the Illinois basin,which is the cheapest coal to mine.
Good fundamentals. Great dividend. They increase the payout every quarter.Coal won't be going away anytime soon
ARLP faces some headwinds with regard to political and ecological issues. However, I think it has fallen too far, too fast. It may have a ways to go down yet, but assuming there is no threat to the dividend, it almost has to go back up from current levels.
Keeping an eye on it...
new regulations for coal burning on the way
Great yield and good fundamentals.
I used to own this when it was $40 then sold out of boredom. Oops! Buying in again at $71 and holding until they stop raising dividends or 50 years, whichever comes first. What a great dividend payer. These dividends have got to cause share price appreciation.
Outstanding company in the coal industry. Increases its dividend every quarter, 13% revenue growth, 20% earnings growth, 13% dividend growth, can't get better than that. Payouts are more than covered by free cash flow so you are not getting part of the assets back like with other partnerships.
It is a high growth stock and it pays a dividend.
Coal supplies more than half the electricity consumed in the U.S. and a quarter of the world's coal reserves are in this country. It has a healthy dividend yield of 4.8% and a 5 year dividend growth rate of 13.72. It is outperforming both the S&P and its' peers
TMFUltralong sayaAlliance Resource provides coal to electric utilities for energy generation. It's arguably one of the premier dividend stocks, having raised its dividend in 25 of the past 40 quarters; it currently yields a handsome 4.5%. Alliance Resource's operating margins also handily outpace many of its rivals, including the much larger CONSOL Energy. With nuclear energy's safety coming into question, and Germany taking the lead in moving away from nuclear, coal seems like a clear-cut winner in the intermediate future. As long as Alliance Resources can keep up its torrid pace of dividend growth, shareholders could do a lot worse than this company.
I have been a long term holder of ARLP. It has a nice cashflow, long term contracts, and increasing production. What is not hard to like? It pays you a nice dividend while you hold it and it has been increasing the dividend by about 8% per year. The only risk I see would be if they had a major mining accident.
I know Obama has previously said he wants to bankrupt the coal industry prior to being elected, and maybe he does... but even if you add a carbon VAT tax to the coal business, which seems to be the major fear, I believe this company will still hang in. Coal demand is expected to grow substantially, probably around 25% per year, but even if this company has 0 growth and earns $7 per share with book value of $12 per share, 10 years worth of earnings is plenty, even if you discount the earnings to present value.Z score is good too meaning low chance of bankruptcy...ROE,ROI,ROA is incredible meaning there likely is good management... On the upside if there is growth and no political intervention this is an incredible opportunity here.
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