Analyzing Westmoreland Coal (WLB) & Alliance Resource Partners, L.P. (ARLP)

Westmoreland Coal (NASDAQ: WLB) and Alliance Resource Partners, L.P. (NASDAQ:ARLP) are both oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.

Valuation & Earnings

This table compares Westmoreland Coal and Alliance Resource Partners, L.P.’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Westmoreland Coal $1.43 billion 0.03 $231.38 million ($5.54) -0.42
Alliance Resource Partners, L.P. $1.94 billion 1.24 $713.15 million $4.13 4.44

Alliance Resource Partners, L.P. has higher revenue and earnings than Westmoreland Coal. Westmoreland Coal is trading at a lower price-to-earnings ratio than Alliance Resource Partners, L.P., indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Westmoreland Coal and Alliance Resource Partners, L.P.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Westmoreland Coal -7.24% N/A -6.58%
Alliance Resource Partners, L.P. 19.47% 34.60% 17.36%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Westmoreland Coal and Alliance Resource Partners, L.P., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Westmoreland Coal 0 1 2 0 2.67
Alliance Resource Partners, L.P. 0 1 3 0 2.75

Westmoreland Coal currently has a consensus target price of $10.67, indicating a potential upside of 361.76%. Alliance Resource Partners, L.P. has a consensus target price of $27.75, indicating a potential upside of 51.23%. Given Westmoreland Coal’s higher probable upside, equities research analysts clearly believe Westmoreland Coal is more favorable than Alliance Resource Partners, L.P..

Volatility and Risk

Westmoreland Coal has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, Alliance Resource Partners, L.P. has a beta of 0.69, meaning that its stock price is 31% less volatile than the S&P 500.

Insider and Institutional Ownership

78.3% of Westmoreland Coal shares are held by institutional investors. Comparatively, 16.1% of Alliance Resource Partners, L.P. shares are held by institutional investors. 1.4% of Westmoreland Coal shares are held by company insiders. Comparatively, 44.0% of Alliance Resource Partners, L.P. shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Alliance Resource Partners, L.P. pays an annual dividend of $2.00 per share and has a dividend yield of 10.9%. Westmoreland Coal does not pay a dividend. Alliance Resource Partners, L.P. pays out 48.4% of its earnings in the form of a dividend.

Summary

Alliance Resource Partners, L.P. beats Westmoreland Coal on 11 of the 15 factors compared between the two stocks.

Westmoreland Coal Company Profile

Westmoreland Coal Company is an energy company. The Company operates through six segments: Coal-U.S., Coal-Canada, Coal-(WMLP), Power, Heritage and Corporate. The Coal-U.S. segment includes the operations of coal mines located in Montana, North Dakota, Ohio, Texas and New Mexico. The Coal-Canada segment includes the operations of coal mines located in Alberta and Saskatchewan. The Coal-WMLP segment includes the operations of Westmoreland Resource Partners, LP, a coal master limited partnership. The Power segment includes its Roanoke Valley Power Facility (ROVA) operations located in North Carolina. The Heritage segment includes the benefits it provides to former mining operation employees, as well as other administrative costs associated with providing those benefits and cost containment efforts. It produces and sells thermal coal primarily to investment grade utility customers under cost-protected contracts, as well as to industrial customers and barbeque briquettes manufacturers.

Alliance Resource Partners, L.P. Company Profile

Alliance Resource Partners, L.P. is a producer and marketer of coal primarily to the United States utilities and industrial users. The Company operates through segments, including Illinois Basin, Appalachia, and Other and Corporate. The Illinois Basin segment consists of various operating segments, including Webster County Coal, LLC’s Dotiki mining complex, Gibson County Coal, LLC’s mining complex, which includes the Gibson North mine and Gibson South mine, Hopkins County Coal, LLC’s mining complex, which includes the Elk Creek mine, the Pleasant View surface mineable reserves and the Fies property, White County Coal, LLC’s, Pattiki mining complex, Warrior Coal, LLC’s mining complex, Sebree Mining, LLC’s mining complex, which includes the Onton mine and River View Coal, LLC mining complex. The Appalachia segment consists of multiple operating segments, including the Mettiki mining complex, the Tunnel Ridge mining complex and the MC Mining mining complex.

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