The Best Coal MLPs #3 — Alliance Resource Partners (ARLP)
Distribution Yield: 5.6%
Based on Alliance Resource Partners (ARLP) continued positive results and surging share price, you would never know that the coal sector is going through a major crisis right now. Unlike JRCC, the firm posted record results for the 13th consecutive year. Its latest results showed that for the full year of 2013, Alliance managed to grow its revenue by 8.4% and earnings by 18%.
That’s a stark contrast to the rest of the coal sector.
The reason for the outperformance over other coal stocks has to do with ARLP’s geographic advantage. The coal miner has 11 mines in the Illinois Basin and Northern Appalachian regions. Pricing for coal from these two areas remain high, while costs to produce remain low. The Illinois Basin features some of the cheapest mine costs around.
As such, ARLP has been able to continuously report great revenues and sales volumes, while other coal stocks have stumbled.
It’s also been great for shareholders of ARLP. Alliance currently yields a juicy 5.6% and has raised its dividend for the last 22 consecutive quarters.
As of this writing, Aaron Levitt did not hold a position in any of the aforementioned securities.