AMR to ARCH: Top five coal stocks to watch amid energy crunch

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 AMR to ARCH: Top five coal stocks to watch amid energy crunch
Image source: © Bsauter | Megapixl.com

Highlights: 

  • Coal is one of the most polluting fossil fuels in the world. 
  • European Union agreed to ban the import of Russian coal in April this year.
  • Countries are buying coal for their short-term requirement with an inclination toward natural gas for the long term.  

Coal is one of the most polluting fossil fuels in the world. Despite being a polluting source of energy, emitting the highest amount of carbon from every unit, coal is again in demand, with major economies buying it to meet their short-term requirement. This came in the wake of the war, and the consequent energy crisis emanated from it and related sanctions. 

 

The requirement is led by Europe, which wants to keep electricity flowing in the houses and factories when Russia cut gas supplies. 

 

European Union agreed to ban the import of Russian coal in April this year. Now, most of the major countries in Europe are preparing to reignite coal power plants and accumulate natural gas ahead of the fuel-demanding winter season.

 

In the backdrop of the recent focus on coal purchase, here we will discuss five stocks that gave more than 55% return YTD.  

Alpha Metallurgical Resources, Inc. (NYSE: AMR)

Closing price on July 1, 2022: US$124.87

Bristol, Tennessee-based Alpha Metallurgical Resources Inc is a coal mining company. Its mining operations consist of surface and underground mines and coal preparation plants. The company extracts, processes and markets met and thermal coal to steel and coke producers, electric utilities, and industrial customers.

For the three months ended March 31, 2022, the company generated a revenue of US$1.07 billion compared to US$0.386 billion in the same quarter the previous year. The net income came in at US$400.9 million or US$20.52 per share diluted compared to the net loss of US$32.9 million or US$1.79 per share diluted in the March quarter of 2021.  

The stock has a market capitalization of US$2.12 billion and a P/E ratio of 3.09. Its forward P/E ratio for one year is 1.48, its dividend yield is 1.2%, and the annualized dividend per share is US$1.5.

The stock traded between US$186.98 and US$21.28 in the last 52 weeks.

CONSOL Energy Inc. (NYSE: CEIX)

Closing price on July 1, 2022: US$48.12

Canonsburg, Pennsylvania-based CONSOL Energy Inc. produces and exports bituminous thermal coal. Its activities involve the preparation, mining, and marketing of thermal coal.

 

The company earned a revenue of US$358 million for the quarter ended March 31, 2022, compared to US$342 million in the previous year. Its net loss was US$4.45 million or US$0.13 per diluted share compared to the net income of US$26.4 million or US$0.75 per share diluted in the corresponding quarter a year ago. 

 

The stock has a market capitalization of US$1.48 billion, and the forward P/E ratio for one year is 5.08

 

The stock traded between US$59.38 and US$16.15 in the last 52 weeks.

Hallador Energy Company (NASDAQ: HNRG)

Closing price on July 1, 2022: US$5.81

Closing price on July 1, 2022: US$5.81

 

Hallador Energy Co. is a coal mining company based in Terre Haute, Indiana. It has an equity interest in oil and gas exploration companies in Indiana and Michigan. 

 

It sells the majority part of its coal to coal-fired power plants.

 

For the three months ended March 31, 2022, its revenue was US$58.9 million compared to US$46.7 million in the previous year. It incurred a net loss of US$10.1 million, or US$0.33 per diluted share, compared to the net loss of US$1.03 million or US$0.03 per diluted share. 

 

The HNRG stock traded in the range of US$7.70 to US$1.99 in the last 52 weeks. The stock has a market capitalization of US$167 million currently. 

Peabody Energy Corporation (NYSE: BTU)

Closing price on July 1, 2022: US$21.04

Peabody Energy Corp is a coal mine company. Saint Louis, Missouri-based company mines and sells coal through its approximately 17 coal mines. Its operating segments include Seaborne Thermal Mining, Seaborne Metallurgical Mining, Midwestern US Mining, Powder River Basin Mining, Other Thermal Mining, and Corporate and Other.

The company reported a revenue of US$691.4 million in the March quarter of 2022, compared to US$651.3 million in the same quarter the previous year. It booked a net loss of US$119.5 million or US$0.88 per common share diluted compared to the loss of US$80.1 million or US$0.81 per common share diluted in the March quarter of 2021. 

The stock has a market capitalization of US$2.62 billion and a P/E ratio of 7.64. Its forward P/E ratio for one year is 4.58.

The stock traded between US$33.29 and US$7.76 in the last one year.

AMR to ARCH: Top five coal stocks to watch amid energy crunch

© Danicek | Megapixl.com

Arch Resources, Inc. (NYSE: ARCH)

Closing price on July 1, 2022: US$143.68

Saint Louis, Missouri-based Arch Resources Inc. produces metallurgical and coking coal. 

It sells its coal to steel mills, power plants, and industrial facilities. Its operating segments are Powder River Basin, Metallurgical, Other Thermal, and Corporate. 

For the three months ended March 31, 2022, the company generated a revenue of US$867.9 million compared to US$357 million in the same quarter in the prior year. Its net income was US$271.8 million or US$12.89 per diluted share compared to the net loss of US$6.04 million or US$0.40 per share diluted in the March quarter of 2021.

The stock has a market capitalization of US$1.98 billion and a P/E ratio of 4.03. Its forward P/E ratio for one year is 2.30, the dividend yield is 0.7%, and the annualized dividend is US$1.0.

The stock traded between US$183.53 to US$53.42 in the last 52 weeks.

Bottom line:

The coal production by China and India increased the global investment by 10% in 2021, according to the International Energy Agency (IEA), reported WSJ.  

 

While efforts have been made internationally to keep global temperatures close to 1.5 degrees by the end of this century, this emergent use of coal is a threat to this target. 

The only relief as of now is that the countries are piling up coal for short-term needs. They are inclined toward the natural gas market for long-term requirements. Few countries have even signed long-term deals with the US and Qatar for liquified natural gas.

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