A New Deal Between Coal and Utility Heavyweights

After a rough year in 2012, coal companies hope that they could bounce back a bit this year. In the latest deal between utilities and the coal industry, Duke Energy (NYSE: DUK  ) has agreed to purchase between 1.7 million and 1.9 million short tons of coal from Peabody Energy (NASDAQOTH: BTUUQ  ) .

Currently, Peabody Energy is the lowest-cost producer of coal in the United States, which should be a critical fact now that natural gas prices are above $4 per MMBtu. It is well-diversified geographically and is the leading player in the cheapest basins in the U.S.

If you are an investor looking for another coal company that could capitalize from rising natural gas prices, turn to CONSOL Energy (NYSE: CNX  ) . This is a company that owns the largest export facility on the East Coast and has turned the majority of its attention toward natural gas production, a move that is likely to provide a nice hedge against any continued domestic coal weakness. 

The domestic market isn't the only place these coal companies are trying to sell. Exports are becoming a much bigger part of the domestic coal landscape, and Peabody Energy has deals in place to get its cheaper coal from the Powder River and Illinois basins to India, China, and the EU. For investors looking to capitalize on a rebound in the U.S. coal market, The Motley Fool has authored a special new premium report detailing exactly why Peabody Energy is perhaps most worthy of your consideration. Don't miss out on this invaluable resource -- simply click here now to claim your copy today.

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Related Tickers

9/26/2016 3:59 PM
BTUUQ $1.60 Up +0.02 +1.27%
Peabody Energy Cor… CAPS Rating: *
DUK $82.15 Down -0.37 -0.45%
Duke Energy CAPS Rating: ***
CNX $18.17 Up +0.77 +4.43%
CONSOL Energy CAPS Rating: ***