Financial Analysis: Westmoreland Coal (WLB) & CNX Coal Resources (CNXC)
Westmoreland Coal (NASDAQ: WLB) and CNX Coal Resources (NYSE:CNXC) are both small-cap oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, risk, valuation, institutional ownership, earnings, analyst recommendations and profitability.
Institutional & Insider Ownership
78.2% of Westmoreland Coal shares are owned by institutional investors. Comparatively, 59.9% of CNX Coal Resources shares are owned by institutional investors. 1.4% of Westmoreland Coal shares are owned 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.
CNX Coal Resources pays an annual dividend of $2.05 per share and has a dividend yield of 13.7%. Westmoreland Coal does not pay a dividend. CNX Coal Resources pays out 134.9% 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 is a breakdown of current ratings and recommmendations for Westmoreland Coal and CNX Coal Resources, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|CNX Coal Resources||0||1||5||0||2.83|
Westmoreland Coal presently has a consensus target price of $10.67, indicating a potential upside of 346.30%. CNX Coal Resources has a consensus target price of $21.60, indicating a potential upside of 44.00%. Given Westmoreland Coal’s higher probable upside, equities analysts clearly believe Westmoreland Coal is more favorable than CNX Coal Resources.
Valuation and Earnings
This table compares Westmoreland Coal and CNX Coal Resources’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Westmoreland Coal||$1.43 billion||0.03||$231.38 million||($5.54)||-0.43|
|CNX Coal Resources||$316.77 million||1.10||$95.25 million||$1.52||9.87|
Westmoreland Coal has higher revenue and earnings than CNX Coal Resources. Westmoreland Coal is trading at a lower price-to-earnings ratio than CNX Coal Resources, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Westmoreland Coal has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500. Comparatively, CNX Coal Resources has a beta of 1.52, meaning that its stock price is 52% more volatile than the S&P 500.
This table compares Westmoreland Coal and CNX Coal Resources’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|CNX Coal Resources||11.26%||22.89%||7.21%|
CNX Coal Resources beats Westmoreland Coal on 9 of the 15 factors compared between the two stocks.
Westmoreland Coal Company Profile
Westmoreland Coal Company is an energy company. The Company operates through six segments: Coal-U.S., Coal-Canada, Coal-(WMLP), Power, Heritage and Corporate. The Coal-U.S. segment includes the operations of coal mines located in Montana, North Dakota, Ohio, Texas and New Mexico. The Coal-Canada segment includes the operations of coal mines located in Alberta and Saskatchewan. The Coal-WMLP segment includes the operations of Westmoreland Resource Partners, LP, a coal master limited partnership. The Power segment includes its Roanoke Valley Power Facility (ROVA) operations located in North Carolina. The Heritage segment includes the benefits it provides to former mining operation employees, as well as other administrative costs associated with providing those benefits and cost containment efforts. It produces and sells thermal coal primarily to investment grade utility customers under cost-protected contracts, as well as to industrial customers and barbeque briquettes manufacturers.
CNX Coal Resources Company Profile
CNX Coal Resources LP is a producer of high-British thermal units (Btu) thermal coal in the Northern Appalachian Basin and the eastern United States. It is engaged in the management and development of coal operations of CONSOL Energy Inc. (CONSOL Energy) in Pennsylvania. It holds interest in, and operational control over, CONSOL Energy’s Pennsylvania Mining Complex, which consists of three underground mines and related infrastructure that produce high-Btu bituminous thermal coal that is sold primarily to electric utilities in the eastern United States. The Pennsylvania Mining Complex includes the Bailey Mine, the Enlow Fork Mine and the Harvey Mine. It mines its reserves from the Pittsburgh Number eight Coal Seam, which is a contiguous formation of uniform, Btu thermal coal. Its Bailey Mine is located in Enon, Pennsylvania. Its Enlow Fork Mine is located directly north of the Bailey Mine. Its Harvey Mine is located directly east of the Bailey and Enlow Fork Mines.
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