1 Metric That Should Terrify Investors in These 3 Coal Stocks

We all know that coal companies have struggled to generate returns for investors, but now Alpha Natural Resources, Arch Coal, and Walter Energy are struggling to pay their creditors as well.

Tyler Crowe
Tyler Crowe
Apr 3, 2014 at 12:25PM
Energy, Materials, and Utilities

Being an investor in Alpha Natural Resources (NASDAQOTH:ANRZQ), Arch Coal (NASDAQOTH:ACIIQ), and Walter Energy (NASDAQOTH:WLTGQ) has been nothing but discouraging for the past couple of years.

ANR Chart

ANR data. Source: YCharts.

However, all three have gone from just discouraging to flat-out concerning. Not only are they not generating any returns for shareholders, but they aren't even generating enough of a return on its coal contracts to pay the interest payments on their debt. 

With EBITDA-to-interest expense ratios dropping below 1 and the market for coal continually looking weak, these companies will need to rely on their cash hoards to cover payments for the foreseeable future. Find out how long these companies can hold out for better days by tuning into the video below.