Financial Analysis: Arch Coal (ARCH) versus Westmoreland Resource Partners (WMLP)
Arch Coal (NYSE:ARCH) and Westmoreland Resource Partners (NYSE:WMLP) are both basic materials companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, institutional ownership, earnings, valuation, risk and analyst recommendations.
Arch Coal pays an annual dividend of $1.60 per share and has a dividend yield of 1.9%. Westmoreland Resource Partners pays an annual dividend of $0.12 per share and has a dividend yield of 5.8%. Arch Coal pays out 14.1% of its earnings in the form of a dividend.
This table compares Arch Coal and Westmoreland Resource Partners’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Arch Coal||$2.32 billion||0.67||$238.45 million||$11.36||7.31|
|Westmoreland Resource Partners||N/A||N/A||N/A||N/A||N/A|
Arch Coal has higher revenue and earnings than Westmoreland Resource Partners.
This table compares Arch Coal and Westmoreland Resource Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Westmoreland Resource Partners||N/A||N/A||N/A|
This is a summary of recent ratings for Arch Coal and Westmoreland Resource Partners, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Westmoreland Resource Partners||0||0||0||0||N/A|
Arch Coal presently has a consensus price target of $104.75, indicating a potential upside of 26.10%. Given Arch Coal’s higher probable upside, research analysts clearly believe Arch Coal is more favorable than Westmoreland Resource Partners.
Insider & Institutional Ownership
57.7% of Arch Coal shares are held by institutional investors. Comparatively, 0.4% of Westmoreland Resource Partners shares are held by institutional investors. 0.3% of Arch Coal shares are held by company insiders. Comparatively, 2.0% of Westmoreland Resource Partners shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Arch Coal beats Westmoreland Resource Partners on 7 of the 10 factors compared between the two stocks.
About Arch Coal
Arch Coal, Inc. produces and sells thermal and metallurgical coal from surface and underground mines. As of December 31, 2017, the company operated 9 active mines located in Wyoming, West Virginia, Kentucky, Virginia, Colorado, and Illinois. It also owned or controlled, primarily through long-term leases, approximately 28,292 acres of coal land in Ohio; 1,060 acres of coal land in Maryland; 10,108 acres of coal land in Virginia; 359,160 acres of coal land in West Virginia; 98,488 acres of coal land in Wyoming; 267,857 acres of coal land in Illinois; 34,446 acres of coal land in Kentucky; 9,840 acres of coal land in Montana; 21,802 acres of coal land in New Mexico; 358 acres of coal land in Pennsylvania; and 20,165 acres of coal land in Colorado, as well as owned or controlled through long-term leases smaller parcels of property in Alabama, Indiana, Washington, Arkansas, California, Utah, and Texas. The company sells its products to utility, industrial, and steel producers in the United States and internationally. Arch Coal, Inc. was founded in 1969 and is headquartered in St. Louis, Missouri.
About Westmoreland Resource Partners
Westmoreland Resource Partners, LP, together with its subsidiaries, produces and markets thermal coal in the United States. The company also produces surface mined coal. It operates 1 surface mine in Wyoming; and 4 active mining complexes in Ohio comprising 13 surface mines. The company markets its coal to electric utilities with coal-fired power plants under coal sales contracts; and electric cooperatives, municipalities, and industrial customers in Wyoming, Kentucky, Michigan, Ohio, and West Virginia. Westmoreland Resources GP, LLC operates as the general partner of the company. The company was formerly known as Oxford Resource Partners, LP and changed its name to Westmoreland Resource Partners, LP in January 2015. The company was founded in 1985 and is based in Englewood, Colorado. Westmoreland Resource Partners, LP is a subsidiary of Westmoreland Coal Company.
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