Without European news eviscerating stocks, the markets enjoyed a quiet rally today.

The Dow Jones Industrial Average (INDEX: ^DJI), finished up 32 points, or 0.3%, lagging the larger half-percent gain notched by the S&P 500. The Nasdaq's 0.6% increase was twice as much.

After getting absolutely killed yesterday, the energy sector saw a nice rebound as oil, still under $80 per barrel, ticked slightly up. The Dow's top two performing stocks were the Big Oil majors Chevron, climbing 1.9%, and ExxonMobil, with its 1.4% gain. However, all is not well in the world of conventional energy.

The coal sector has been beaten black and blue this past year, as dwindling demand from China for met coal and increased utility switching to natural gas from thermal coal here at home have put pressures on the industry. James River Coal (Nasdaq: JRCC) plunged 15% on an S&P downgrade, citing continued weakness through next year and sparking a broad sell-off. The analyst is concerned that with the company losing money both now and into the future, its tenuous balance sheet, which has $169 million in cash versus $586 million in debt, could put the company in peril.

Both Patriot Coal (NYSE: PCX) and Arch Coal (NYSE: ACI) were caught in the wave of selling, closing down 8% and 5%, respectively. Like James River, Arch swung to a loss in the most recent quarter, and analysts don't see it letting up anytime soon. However, Arch's balance sheet has almost $4 billion in net debt after the acquisition of International Coal Group last year. Patriot Coal is losing money at an increasing rate -- $98 million in 2010 and $139 million in 2011 -- and it's not showing signs of improvement. Even more alarming, dating back to 2004, the company has never generated a penny in free cash flow.

For investors actively combing through the wreckage of the coal industry for deals, take a closer look at a best-of-breed operator that's sitting at a 52-week low. Peabody Energy (NYSE: BTU) is solidly profitable, shares are right at book value, it's priced at a discount to its growth expectations, and it generates sold free cash flow. Sometimes it pays to be greedy when others are fearful.

One additional advantage of Peabody versus some competitors is getting paid a dividend while the industry comes back into favor. While no coal company is part of the index, the Dow is loaded with companies with solid dividend payouts and highly sustainable business models built for the long haul. The stocks highlighted in The Motley Fool's new special free report, "The 3 Dow Stocks Dividend Investors Need," all have an X factor that makes them stand out from their illustrious Dow peers. Download it now, for free.