Much of the talk about a North American “energy revolution” and the United States becoming the world’s biggest energy producer before the end of the decade is predicated on huge discoveries of oil and especially natural gas in previously unreachable areas throughout the country. Indeed, through 2011 and 2012, natural gas was beginning to dislodge coal as the dominant source of electricity in the U.S. One year ago, natural gas and coal each supplies about 32 percent of America’s electricity.
But with the boom in natural gas came all the complications of commodity pricing, no less the logic of markets, investors, and traders in general. As cheap as $2 dollars per million British thermal units only a year ago, natural gas now costs more than $4 per Btu.
This has created a situation, as of March, in which coal, while supplying less U.S. electricity than it ever has, is still the primary source of America’s electricity (over 40 percent). Furthermore, U.S. coal companies are incredibly interested in exporting coal to emerging markets like China, who still rely on cheap energy sources, regardless the environmental impact.
The following 11 stocks represent U.S. coal companies that stand to profit from the above-described state of affairs:
Alliance Resource Partners LP (ARLP) – Alliance produces and markets coal mainly to utilities and industrial consumers in the U.S. The company has a market cap of $2.81 billion, with sales of $2.03 billion for the past year. Shares closed on Friday at $76.14, up 35.5 percent in 2013.
Alpha Natural Resources Inc. (ANR) – Alpha extracts, processes, and markets steam and metallurgical coal in the U.S. The company’s market cap is $1.55 billion, with $6.37 billion in sales over the past year. Shares closed on Friday at $7.04, down 27.7 percent so far in 2013.
Arch Coal Inc. (ACI) – Arch Coal produces and sells steam and metallurgical coal from both surface and underground mines in the United States. With a market cap of $1.13 billion, and sales of $3.94 billion over the last 12 months, Arch closed Friday at $5.31 per share, down 27 percent on the year.
Cliffs Natural Resources Inc. (CLF) – Along with iron and lump ore, Cliffs runs metallurgical and thermal coal mines in West Virginia and Alabama. The company has a market cap of $3.12 billion, with sales over the last year at $5.80 billion. On Friday, shares closed at $20.37, down 46.5 percent over 2013.
Cloud Peak Energy Inc. (CLD) – Cloud Peak runs coal mining operations in the Powder Basin, in Wyoming and Montana. The company’s market cap is $1.18 billion sales at $1.48 billion over the past year. Shares closed the week at $19.43, up 0.5 percent in 2013, and 22 percent during the last quarter.
CONSOL Energy Inc. (CNX) – CONSOL produces thermal coal (as well as natural gas) for energy and raw material markets in the U.S., Canada, and Western Europe. The company has a market cap of $8.11 billion, and sales for the past year at $5.29 billion. Shares ended the week at $35.46, and have advanced nearly 11 percent in 2013.
James River Coal Co. (JRCC) – James River mines, processes, and sells thermal and metallurgical coal in the Southeastern U.S. With a market cap of $111.52 million, and sales of $990.93 million over the last year, the company’s shares trade for $3.11, and though this represents a 3 percent decline over 2013, James River has advanced over 75 percent in the past month alone.
Oxford Resource Partners LP (OXF) – Oxford Resources produces and sell steam and surface-mined coal in the U.S. The company has a market cap of $63.02 million, with $383.32 million in sales over the past year. With shares currently trading at $3, Oxford has dropped 31.5 percent in 2013.
Peabody Energy Corp. (BTU) – Peabody mines thermal and metallurgical coal for utilities and industry. With a market cap of $5.51 billion, and sales of $7.79 billion, the company’s shares closed Friday at $20.44, down 22.6 percent in 2013.
Natural Resource Partners LP (NRP) – NRP owns and leases coal reserves throughout the United States. With a market cap of $2.54 billion, and sales over the last year of $379.15 million, the company’s shares are trading for $23.12, up nearly 31 percent in 2013.
Walter Energy Inc. (WLT) – Walt Energy produces and exports metallurgical coal for the steel industry, as well as thermal coal for electric utilities. The company has a market cap of $1.16 billion, with $2.26 billion in sales over the past year. Shares, trading at $18.52, are down nearly 48 percent in 2013, though they’ve rebounded almost 4 percent over the past month.
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