The past year has been brutal for coal, and the nation's coal stocks have taken an absolute beating. There are a variety of factors behind coal's downfall, with a major reason being depressed natural gas prices that have caused utility customers to switch from coal to natural gas.

The past year has brought steep drops in share prices of major coal producers, including CONSOL Energy (CNX -0.12%) and Alpha Natural Resources (NYSE: ANR), as their business conditions deteriorate.

With all this in mind, many investors may believe the entire coal business model is in jeopardy. However, it just so happens that there's one coal stock that's not only surviving the current environment, but thriving, and represents a fantastic buy.

Most coal companies are struggling mightily
Alpha Natural is simply in serious trouble. This was a $43 stock three years ago, but has lost more than 80% of its value since then. The company's fundamentals have deteriorated for many quarters in a row. Alpha Natural reported a second-quarter loss of $185 million, or $0.84 per share.

In its most recent quarter, Alpha Natural's business saw declines in every relevant metric for a coal company. Its margins and volumes collapsed. In the most recent quarter, Alpha realized a margin of $2.72 per ton of coal it sold. That compares to a margin of $6.57 per ton in the same quarter last year.

Coal volumes sold fell a staggering 19%. All told, these factors combined to result in a 28% drop in quarterly revenue.

CONSOL, meanwhile, has admittedly fared better than many of its suffering coal competitors. Shares exchange hands for $33 per share, down from $40 per share one year ago. While a 17% drop is nothing to brag about, it's at least measurably better than Alpha's share price performance in recent years.

CONSOL's better performance is due to its more diversified operations, as CONSOL isn't a pure coal company. Instead, it operates in gas as well.

Unfortunately, this didn't stop CONSOL from losing $13 million in its second quarter, compared to a $153 million profit in the same quarter last year. It's true that last year's quarter benefited from gains from asset sales, but CONSOL still took a step backward.

CONSOL's coal division results reflect the extremely challenging environment for coal. Like many of its rivals, CONSOL saw reduced coal prices and volumes during the quarter.

The company's strategy going forward involves cost cuts and asset sales, which should buoy profits but should not be viewed as a viable long-term plan.

The canary in the coal mine
Investors who are interested in the coal space would do themselves a huge favor by considering Alliance Resource Partners (ARLP -0.05%), a limited partnership that holds a nearly $3 billion market capitalization.

Alliance Resource amazingly excels where others fail. Its success in what is such a tough operating environment for coal is truly astounding.

The company's second-quarter results set a record for revenues, coal sales volumes, and EBITDA. In all, revenue and EBITDA rose 4.5% and 14.7%, respectively, year over year.

But perhaps the best reason to own Alliance Resource Partners is its compelling distribution, which the company keeps bumping higher every quarter, indicative of its success.

Alliance Resource Partners increased its distribution by 2% this quarter, and on a year-over-year basis, its $4.61 per-unit distribution is 8.5% higher than it was this time last year.

The increased distribution represents the 21st consecutive quarterly bump up in a row. Alliance Resource's new payout represents a solid 6% yield at recent prices for new investors.

Looking ahead, the future remains bright for Alliance Resource Partners. Along with its second-quarter results, the company upped its 2013 guidance for revenue and coal sales volume. And, assuming customer deliveries occur as planned, Alliance Resource Partners is fully priced and contracted for its expected 2013 coal sales.

Let Alliance Resource Partners fire up your portfolio
Operating in the coal industry might give pause to a potential investor. It's true that coal is under pressure with cheap natural gas and the prevailing push for clean energy sources such as wind and solar.

And, there's no denying the serious troubles facing many of the nation's coal companies.

At the same time, not all is lost for America's coal producers. Alliance Resource Partners continues to shine while others struggle. As Alpha Natural and CONSOL Energy lose money and report lower metrics across the board, Alliance Resource Partners is ramping up its production and profits, and funneling an ever-increasing stream of cash back to unit holders.

In my mind, for the best-in-breed coal company in the United States, look no further than Alliance Resource Partners.