I'm amused that Alpha Natural Resources (NYSE:ANR) will be the last coal company I cover in this earnings go-around. As a large producer of metallurgical and Appalachian steam coal, it's a worthwhile candidate to review in the context of the coal sector.

Like many of its peers, Alpha had a good quarter to kick off the year. Total revenue rose 54%, and coal revenue rose by a similar 55%. The company not only sold 29% more coal, but sold it for a better price -- average realizations climbed 21%. Margins improved notably, and the company beat the average published analyst guess (if you're into that sort of thing).

Alpha is slightly different from other coal companies. For one thing, it produces quite a bit of metallurgical coal -- close to 40% of its sales volume this quarter. That makes it larger than Massey (NYSE:MEE) in terms of both absolute met coal tonnage sold and the percentage of its business devoted to that product. For those not familiar, met coal is a higher-energy variety of coal used by steelmakers like U.S. Steel (NYSE:X) or POSCO (NYSE:PKX), and it typically trades for a premium price.

But it's not all about met coal -- the company also produces high-quality Appalachian steam coal as well. This coal has a higher energy content than the much-discussed Powder River Basin coal (where Arch Coal (NYSE:ACI) is a big player), and scrubber installations at utilities mitigate some of its associated pollution concerns. In addition, Alpha does have low-sulfur Appalachian coal assets.

Alpha doesn't always stand out in a good way. The company is on the lower end of the EBITDA margin continuum, and the company has a very high debt level, even by the standards of a debt-happy industry. While I'm not too troubled by interest coverage right now, I'd keep an eye on the company's progress with production costs.

Valuing these companies is a bit of a challenge, and I like to use a three-part method that incorporates EBITDA, free cash flow, and the value of the company's reserves. Putting that all in the blender, Alpha comes out as possibly undervalued, but not necessarily cheap in my book.

For more Foolish thoughts on coal:

POSCO is a Motley Fool Income Investor recommendation. Dig into more great dividend-paying stocks with a free 30-day guest pass.

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).