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Reasons to Add Alliance Resource Partners to Your Portfolio

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Earnings estimates for Alliance Resource Partners, L.P. (ARLP - Free Report) have been revised upward in the past 30 days, reflecting analyst’s optimism in the stock. The Zacks Consensus Estimate for 2018 and 2019 earnings moved up 6.1% and 13% to $3.30 and $2.26, respectively in the aforesaid time period.

Let’s focus on the factors that make Alliance Resource a profitable pick.

Earnings & Growth Projections

In second-quarter 2018, Alliance Resource delivered earnings of 64 cents per share, beating the Zacks Consensus Estimate by 1.59%.

The Zacks Consensus Estimate for current-year earnings is pegged at $3.30, reflecting year-over-year improvement of 14.98%.

Price Performance

The units of Alliance Resource have gained 13.1% in the past six months, against the industry’s decline of 2.8%.

 

Zacks Rank & VGM Score

The stock holds a Zacks Rank #2 (Buy) and has an impressive VGM Score of A. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. Back tested results show that stocks with a favorable VGM Score of A or B coupled with a bullish Zacks Rank are the best investment options.

Coal Production

Coal production increased 2.6% to 9.7 million tons in second-quarter 2018 from 9.5 million tons in the prior-year quarter.  Alliance Resource expects total coal production in the range of 40.0- 41.0 million tons in 2018. The new Environmental Protection Agency's (EPA) Affordable Clean Energy (ACE) rule is expected to boost demand for coal and have a positive impact on coal producers.

Lower Debt/Capital

Alliance Resource has debt/capital ratio of 25.43% compared with the industry’s 39.73% and S&P 500 composite’s 41.72%.

Other Stocks to Consider

A few other top-ranked stocks from the Zacks coal industry are Consol Energy Inc. (CEIX - Free Report) , CONSOL Coal Resources LP and Peabody Energy Corporation (BTU - Free Report) .

Consol Energy holds a Zacks Rank #2. The company delivered an average positive surprise of 86.80% in the past four quarters. The Zacks Consensus Estimate for 2018 earnings moved 8.9% north to $5.10 in the past 60 days.

CONSOL Coal sports a Zacks Rank #1. The company delivered an average beat of 2.72% in the trailing four quarters. The consensus mark for current-year earnings rose 8.2% to $2.10 in the past 60 days.

Peabody Energy holds a Zacks Rank #2. It pulled off an average positive surprise of 2.61% in the past four quarters. The consensus estimate for 2018 bottom line has been revised 24.8% upward to $3.62 in the past 60 days.

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Peabody Energy Corporation (BTU) - free report >>

Alliance Resource Partners, L.P. (ARLP) - free report >>

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