Peabody Energy Corporation’s (BTU - Free Report) earnings estimates have been revised upward over the past 30 days, reflecting analysts’ confidence in the stock. The Zacks Consensus Estimate for 2018 and 2019 earnings has moved 5% and 15.4% north, respectively, to $4.22 and $2.93 per share in the same time frame.
Peabody Energy currently sporting a Zacks Rank #1 (Strong Buy), is a producer of coal, serving power and steel customers in more than 25 countries across six continents.
Let’s focus on the factors that make Peabody Energy a stock to bet on for obtaining greater returns.
Price Appreciation: Shares of Peabody Energy have returned 42% in the past 12 months compared with the industry’s growth of 23.4%.
VGM Score: The stock has an impressive VGM Score of A. 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.
Earnings Surprise History: The company boasts an encouraging earnings surprise history, beating estimates in two of the last four quarters, the average beat being 2.61%. Focus on the core assets coupled with industry knowledge will enable the company to increase its operational efficiency as well as maximize its financial performance.
Rising Coal Prices: The company stands to benefit from recent improvements in the metallurgical coal markets. Increase in metallurgical coal prices is expected to boost the company’s coal revenues. Metallurgical coal is expansively used in the steel industry and per the World Steel Association forecast, global demand for the same will likely increase in 2018 and 2019. This should bolster Peabody Energy’s growth prospects.
Dividend Hike: The company continues to deliver valuable returns to its shareholders in the form of regular dividend payouts and share repurchases. In second-quarter 2018, the company hiked the quarterly dividend rate by 8.7% to 12.5 cents per share compared with last quarter’s dividend of 11.5 cents.
Such capital deployment strategy reflects a strong financial position that the company boasts.
Other Stocks to Consider
Some other top-ranked stocks from the same space are Alliance Resource Partners, L.P. (ARLP - Free Report) , Contura Energy (CNTE - Free Report) and CONSOL Coal Resources LP (CCR - Free Report) . While Alliance Resource Partners and Contura Energy sport a Zacks Rank #1, CONCOL Coal carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Alliance Resource Partners reported second-quarter 2018 adjusted earnings of 64 cents per unit, surpassing the Zacks Consensus Estimate of 63 cents by 1.6%. The Zacks Consensus Estimate for 2018 bottom line has been revised 8.5% upward to $3.33 per unit over the past 60 days.
Contura Energy reported second-quarter 2018 adjusted earnings of $5.66 per share, surpassing the Zacks Consensus Estimate of $4.79 by 18.2%. The Zacks Consensus Estimate for 2018 bottom line has been revised 34.5% upward to $20.34 per share over the past 60 days.
CONSOL Coal Resources reported second-quarter 2018 adjusted earnings of 69 cents per unit, surpassing the Zacks Consensus Estimate of 65 cents by 6.2%. The Zacks Consensus Estimate for 2018 bottom line has been revised 11.1% upward to $2.30 per units over the past 60 days.
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