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 L.P.
With that in mind, let's take a closer look at Alliance Resource's business and see what CAPS investors are saying about the stock right now.
Alliance Resource facts
| Headquarters (Founded) | Tulsa, Okla. (1971) |
| Market Cap | $2.88 billion |
| Industry | Coal and consumable fuels |
| Trailing-12-Month Revenue | $1.65 billion |
| Management | CEO Joseph Craft III (since 1999) CFO Brian Cantrell (since 2005) |
| Return on Capital (Average, Past 3 Years) | 19.3% |
| Cash/Debt | $339 million / $725.8 million |
| Dividend Yield | 4.5% |
| Competitors |
Arch Coal CONSOL Energy Peabody Energy |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 97% of the 673 members who have rated Alliance Resource believe the stock will outperform the S&P 500 going forward. These bulls include epeon and secretbonus.
Late last month, epeon touched on several of Alliance Resource's positives:
It has a nice cashflow, long term contracts, and increasing production. What is not hard to like? It pays you a nice dividend while you hold it and it has been increasing the dividend.
Alliance Resource's robust three-year average return on capital of 19.3% even tops that of rivals Arch Coal (5.2%), CONSOL (13.4%), and Peabody (11.8%).
CAPS member secretbonus expands on the Alliance Resource outperform argument:
[E]ven if you add a carbon VAT tax to the coal business, which seems to be the major fear, I believe this company will still hang in. Coal demand is expected to grow substantially ... but even if this company has 0 growth and earns $7 per share ... 10 years worth of earnings is plenty. ... ROE, ROI, ROA is incredible meaning there likely is good management. On the upside if there is growth and no political intervention this is an incredible opportunity here.
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