4-Star Stocks Poised to Pop: Arch Coal

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, coal producer Arch Coal (NYSE: ACI  ) has earned a respected four-star ranking.

With that in mind, let's take a closer look at Arch Coal's business and see what CAPS investors are saying about the stock right now.

Arch Coal facts

Headquarters (founded) St. Louis (1969)
Market Cap $1.3 billion
Industry Coal and consumable fuels
Trailing-12-Month Revenue $4.5 billion
Management CEO John Eaves (since April 2012)
CFO John Drexler (since April 2008)
Return on Equity (average, past 3 years) 4.4%
Cash/Debt $117.8 million / $4.1 billion
Dividend Yield 7.1 %
Competitors Alpha Natural Resources
CONSOL Energy
Peabody Energy

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 95% of the 1,586 members who have rated Arch Coal believe the stock will outperform the S&P 500 going forward.  

A few months ago, one of those Fools, Becker2011, offered some insight into the long-term bull case:

Coal has been beaten down for a while now. This is seemingly a great time to pick up a solid company that is not going [anywhere] soon. As someone who has worked inside of a large power company and seen how much green energy costs ... well let's just say I don't see sweeping changes to the nation's power portfolio [anytime] soon

If you want market-topping returns, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future. Of course, despite a strong four-star rating, Arch Coal may not be your top choice.

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Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Try any of our Foolish newsletter services free for 30 days.

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.


Read/Post Comments (2) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On June 08, 2012, at 3:06 AM, KurtEng wrote:

    Arch cut their dividend. The yield is now around 1.9%.

  • Report this Comment On June 08, 2012, at 6:51 AM, SuntanIronMan wrote:

    I have to disagree completely with the CAPS pitch which this article is based on.

    Whether you agree how and why it is happening (EPA regulations... well, regulations AND incredibly cheap natural gas), sweeping changes to the nation's power portfolio is happening now. Coal is walking that green mile (pun intended). Overseas (China, for example) coal still has a future. But as for our power portfolio in this country, huge chances are already happening. Coal is on the way out and it isn't coming back. Many coal plants in the US are converting to natural gas plants or are possibly just closing for good (unable to do EPA mandated updates in a cost-effective manner). The future for coal in America is nonexistent.

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