Why Alliance Resource Is Poised to Outperform

Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, coal producer Alliance Resource Partners LP (NASDAQ: ARLP  ) has earned a coveted five-star ranking.

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

Alliance Resource facts

Headquarters (founded)

Tulsa, Okla. (1971)

Market Cap

$2.1 billion

Industry

Industrial metals and minerals

Trailing-12-Month Revenue

$2.0 billion

Management

CEO Joseph Craft III (since 1999)
CFO Brian Cantrell (since 2005)

Trailing-12-Month Return on Equity

51.6%

Cash/Debt

$2.1 million / $730.9 million

Dividend Yield

7.7%

Competitors

Arch Coal (NYSE: ACI  )
CONSOL Energy
(NYSE: CNX  )
Peabody Energy
(NYSE: BTU  )

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

On CAPS, 95% of the 733 members who have rated Alliance Resource believe the stock will outperform the S&P 500 going forward.

Just last month, one of those Fools, studyearnenjoy, succinctly summed up the Alliance Resource bull case for our community:

[Alliance Resource] 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. ...

Currently the price of coal in the Illinois basin (which includes parts of western Kentucky for some reason) is [$47.90] per ton. Assuming an incredibly conservative price of [$40 dollars] for the coal over the life of the mine, [Alliance Resource] would generate [$840 million] in revenue each year.

If you want market-topping returns, you need to put together the best portfolio you can. Of course, despite its five-star rating, Alliance Resource may not be your top choice.

If that's the case, we've compiled a special free report for investors called "The 3 Dow Stocks Dividend Investors Need," which uncovers a few other juicy income opportunities. The report is 100% free, but it won't be around forever, so click here to access it now.

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Comments from our Foolish Readers

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  • Report this Comment On December 26, 2012, at 10:53 PM, epeon wrote:

    I have owned ARLP for a long time and it has been good to me. However, having said that, it is primarily a domestic company and, for them to be successful, they have to fight the EPA's war on coal. Hard to fight the government.

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