Red-hot chipmaker AMD pops on surprise Q2 profit >>> READ MORE

7 Small-Cap Stocks With Mega-Growth Potential

Look beyond the headliners to find value and growth in small caps

      View All  

Small-Cap Stocks to Buy: Alliance (ARLP)

Small-Cap Stocks to Buy: Alliance (ARLP)
Source: Shutterstock

Alliance Resource Partners, L.P. (NASDAQ:ARLP) is a U.S. coal miner with operations in the Illinois Basin and Appalachia, basically Illinois, Indiana, Kentucky and West Virginia. ARLP focuses on steam or thermal coal, which is used mainly for generating power for utilities and industrial energy plants. The other type of coal is coking coal, which is used for making iron and steel.

With steel production still at low levels, many big coal operations suffered greatly with the drop in demand for coking coal. But ARLP has weathered the storm better because it sells thermal coal.

Demand has slackened for thermal coal since much of the demand has been shifted to natural gas, which is a more efficient fuel. But coal still has its customers and the new administration in Washington is doing all it can to keep coal alive.

As a limited partnership, the payoff here is more the dividend than the stock appreciation. Right now, ARLP is kicking off a nearly 8% dividend yield.

Next Page

Article printed from InvestorPlace Media,

©2017 InvestorPlace Media, LLC