By Charles Blunt
July 1, 2019 - Westmoreland Resource Partners (OTCMKTS:WMLPQ) and Alliance Resource Partners (NASDAQ:ARLP) are both oils/energy companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, earnings, profitability, risk and dividends.
This is a summary of recent ratings and target prices for Westmoreland Resource Partners and Alliance Resource Partners.
Valuation & Earnings
This table compares Westmoreland Resource Partners and Alliance Resource Partners’ top-line revenue, earnings per share (EPS) and valuation.
Alliance Resource Partners has higher revenue and earnings than Westmoreland Resource Partners.
Insider & Institutional Ownership
25.0% of Alliance Resource Partners shares are held by institutional investors. 2.0% of Westmoreland Resource Partners shares are held by company insiders. Comparatively, 44.0% of Alliance Resource Partners shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Alliance Resource Partners pays an annual dividend of $2.14 per share and has a dividend yield of 12.7%. Westmoreland Resource Partners does not pay a dividend. Alliance Resource Partners pays out 87.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
This table compares Westmoreland Resource Partners and Alliance Resource Partners’ net margins, return on equity and return on assets.
Risk and Volatility
Westmoreland Resource Partners has a beta of 2.3, suggesting that its stock price is 130% more volatile than the S&P 500. Comparatively, Alliance Resource Partners has a beta of 0.98, suggesting that its stock price is 2% less volatile than the S&P 500.
Alliance Resource Partners beats Westmoreland Resource Partners on 9 of the 11 factors compared between the two stocks.
Alliance Resource Partners Company Profile
Alliance Resource Partners, L.P. produces and markets coal primarily to utilities and industrial users in the United States. The company operates through two segments, Illinois Basin and Appalachia. It produces a range of steam and metallurgical coal with sulfur and heat contents. The company operates eight underground mining complexes in Illinois, Indiana, Kentucky, Maryland, and West Virginia. It also leases land and operates a coal loading terminal on the Ohio River at Mt. Vernon, Indiana; and buys and resells coal, as well as owns interests in various oil and gas mineral interests located within producing basins in the continental United States. In addition, the company offers various industrial and mining technology products and services, such as miner and equipment tracking systems, and proximity detection systems. As of December 31, 2018, it had approximately 1.70 billion tons of proven and probable coal reserves in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia. Alliance Resource Management GP, LLC serves as the general partner of the company. The company was founded in 1971 and is based in Tulsa, Oklahoma.