Best Coal Stocks Right Now

Thinking about adding a few coal stocks to your stock portfolio? Consider these energized picks that investors are watching in the coal sector.

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Contributor, Benzinga
February 25, 2024

Alpha Metallurgical (NYSE:AMR)

Alpha Metallurgical Resources Inc is a Tennessee-based coal mining company with operations across Virginia and West Virginia. The company’s portfolio of mining operations consists of underground mines, surface mines and coal preparation plants. It produces low-ash metallurgical coal, including High-Vol. A, Mid-Vol., High-Vol. B, and Low-Vol. coal, which is shipped to domestic and international coke and steel producers. The reportable segments of the company are Met and CAPP – Thermal, of which key revenue is derived from the Met segment. It extracts, processes and markets met and thermal coal from deep and surface mines for sale to steel and coke producers, industrial customers, and electric utilities.

$389.88
1.81[0.47%]
Last update: 4:00PM (Delayed 15-Minutes)
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Open390.000Close389.880
Vol / Avg.196.546K / 231.797KMkt Cap5.179B
Day Range382.170 - 390.98052 Wk Range132.720 - 411.202

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Alliance Resource Partners LP operates as a coal mining company based in the United States. It has four segments Illinois Basin, Appalachia, Oil & Gas Royalties and Coal Royalties. The Illinois Basin comprises underground mining complexes in Illinois, Indiana, Kentucky, Maryland and West Virginia and it makes up for most of the company’s revenue-generating operations. The Appalachia segment comprises the Mettiki mining complex, the Tunnel Ridge mining complex and the MC Mining mining complex. The Oil & Gas Royalties has oil & gas mineral interests held by AR Midland and AllDale I & II and includes Alliance Minerals’ equity interests in both AllDale III and Cavalier Minerals. The Coal Royalties has includes coal mineral reserves and resources owned or leased by Alliance Resource Properties.

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Arch Resources (NYSE:ARCH)

Arch Resources Inc. is a leading coal mining company. It mines and markets a broad slate of high-quality metallurgical products. Arch Resources is committed to delivering exceptional value, creative solutions, consistent product quality and outstanding customer service.

The coal stock has a market cap of $775 million, a 52-week low of $21.80 and a 52-week high of $62.19. Arch Resources has high liquidity and trades more than 349,789 shares per day. It generated revenue of $2.2 billion in 2019.

$167.68
-1.56[-0.92%]
Last update: 4:20PM (Delayed 15-Minutes)
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Open168.200Close167.680
Vol / Avg.255.830K / 336.758KMkt Cap3.079B
Day Range166.705 - 169.50052 Wk Range102.420 - 187.450

BHP Group (NYSE:BHP)

BHP Group is a global leading resources company. It extracts and processes minerals, oil and gas in Australia and the Americas. As an international firm, BHP makes health and safety a priority. It is an environmentally responsible company and supports its many communities around the world.

BHP has a market cap of $129 billion and an annual dividend yield of $2.20 per share. BHP has high liquidity and trades more than 2.1 million shares per day. It generated revenue of $42 billion in 2019.

$58.37
0.01[0.02%]
Last update: 4:16PM (Delayed 15-Minutes)
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Open58.540Close58.310
Vol / Avg.1.650M / 2.434MMkt Cap147.805B
Day Range58.190 - 58.85052 Wk Range54.280 - 69.110

CONSOL Energy (NYSE:CEIX)

CONSOL Energy Inc is a producer and exporter of high-BTU bituminous thermal coal. It owns and operates longwall mining operations in the nation and export terminals on the Eastern seaboard. The principal activity involves mining, preparation, and marketing of thermal coal, sold primarily to power generators. Its operating segment includes PAMC (Pennsylvania Mining Complex); CONSOL Marine Terminal and Other. The company generates maximum revenue from the PAMC segment.

$80.62
-0.41[-0.51%]
Last update: 4:20PM (Delayed 15-Minutes)
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Open80.620Close80.620
Vol / Avg.444.628K / 543.501KMkt Cap2.387B
Day Range79.050 - 81.33052 Wk Range49.350 - 114.300

The coal industry continues to be one of the world’s largest suppliers of energy. In the United States alone, about half a billion short tons of coal are converted to energy every year. Second only to natural gas, coal operations and coal stocks continue to be profitable for investors while powering the country.

Thinking about investing in the coal industry? Our guide to coal stocks will help you learn more about how burning coal works and what to look for in a coal stock. We’ll also introduce you to a few of our favorite brokers for investing in stocks under $5, as well as long-term holds and a few coal stocks that investors have their eyes on this year. 

Quick Look at the Best Coal Stocks:

Overview: Coal Stocks

Coal is a fossil fuel formed by layers of sediment. Millions of years ago, thick layers of plants were covered by dirt and water, as early Earth was mostly made up of swamplands. Plants and animals would die and settle to the bottom of this swamp. After layers and layers of biological material packed on top of one another, an immense amount of pressure changed the carbon in the plant and animal material into hard lumps of coal. 

Coal is used as an energy source because the compressed carbon in the pressured material burns for significantly longer than other materials like wood.

In the 1800s, people began using coal to heat their homes and power early locomotives and ships. Today, coal is primarily burned to generate electricity. When coal is burned in a furnace, the heat from the coal turns water in a furnace into steam. That steam is then used to turn a turbine and generate electricity, which is then distributed to homes via a transformer.  

The U.S. has more coal than any other country — about 25% of the total coal in the world. Coal must be extracted from the ground and pulverized before it can be used to generate electricity. Currently, 25 states have coal mining operations in place.

The term “coal stock” refers to any company involved in coal mining, processing or burning. A company with a coal stock might be responsible for mining coal from the earth, preparing the coal for burning, the burning of the coal, distribution of energy or all 4 processes.

Though coal is abundant, it contains traces of impurities like nitrogen and sulfur. When a coal plant or mining operation burns coal, the coal releases these substances into the air. From there, the impurities combine with water vapor in the atmosphere and fall back to the ground in the form of acid rain. 

Burning coal also releases carbon dioxide, an odorless, colorless gas that traps the Earth’s heat when it builds up in the atmosphere. Burning fossil fuels like coal is thought to contribute to global warming, the gradual increase in the world’s temperatures. “Clean coal” operations that remove certain impurities from coal can help lessen the environmental impact of burning coal for energy. 

Best Online Brokers for Coal Stock

No matter if you’re interested in adding a few coal stocks to your portfolio or you want to locate stocks under $10 to day trade, you need to open a brokerage account before you can place any buy or sell order. If you don’t already have a brokerage account, consider a few of our favorites below.  

Features to Look for in Coal Stock

There are a few features that can help you identify a profitable coal stock. Some features you may want to look out for include:   

  • A positive earnings per share value: A company’s earnings per share (EPS) value indicates how much profit a company is producing per share of stock issued. A positive EPS value indicates that a company is profitable, while a negative EPS shows that the company is losing more money than it’s bringing in. According to research by Fidelity, the average EPS in the energy sector is generally strong, outpacing other industries. 
  • A low price-to-earnings ratio: A company’s price-to-earnings (P/E) ratio is equal to the company’s current share price divided by the company’s EPS. The lower the P/E ratio, the better value that a stock is considered to be by investors.
  • A reasonable dividend yield: Many investors are attracted to the energy sector because these stocks often produce higher-than-average dividends. A dividend is a portion of a company’s profit that is paid out to shareholders.

Though it can be tempting to look for companies with the highest dividend by dollar amount, you should be mindful of each stock’s dividend yield. The dividend yield is calculated by dividing the company’s annual dividend payout by its current share price. 

As a general rule, avoid investing in securities with a dividend yield above 10% — these are usually considered to be very risky investments because a high yield indicates that a dividend cut could be coming soon. 

Adding Energy to Your Portfolio With Coal

With higher-than-average dividends and lower P/E values, coal — and the energy sector as a whole — can be a great income-producing level of diversification to any portfolio. However, it’s important to remember that you should never put all of your financial resources in one area. If you do decide to purchase coal stocks, use them to complement a larger portfolio of total market index funds and S&P 500 funds.

Q

Is coal a good investment?

A

Generally, coal has higher-than-average dividends, so it is considered a good investment.

Q

Where can I find brokers that deal in coal stocks?

A

You can find brokers that deal in coal stocks on the list above.

Q

How many states participate in coal mining?

A

At the present time, 25 states participate in coal mining.

No idea where to get started? Benzinga’s list of the best socially responsible mutual funds is an excellent crash-course in conscious investing, plus you can check out Benzinga’s guides to the best energy stocks, the best energy ETFs and the best renewable energy ETFs.

About Sarah Horvath

Sarah is an expert in the insurance, investing for retirement and cryptocurrency space.