Westmoreland Coal (NASDAQ: WLB) and CNX Coal Resources (NYSE:CNXC) are both small-cap oils/energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.

Profitability

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
Westmoreland Coal -7.24% N/A -6.58%
CNX Coal Resources 11.26% 22.89% 7.21%

Dividends

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.

Analyst Recommendations

This is a summary of recent ratings and target prices for Westmoreland Coal and CNX Coal Resources, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Westmoreland Coal 0 1 2 0 2.67
CNX Coal Resources 0 1 5 0 2.83

Westmoreland Coal presently has a consensus price target of $10.67, indicating a potential upside of 344.44%. CNX Coal Resources has a consensus price target of $21.60, indicating a potential upside of 44.48%. Given Westmoreland Coal’s higher possible upside, analysts clearly believe Westmoreland Coal is more favorable than CNX Coal Resources.

Earnings and Valuation

This table compares Westmoreland Coal and CNX Coal Resources’ gross revenue, earnings per share 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 9.84

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.

Insider and Institutional 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 hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

Westmoreland Coal has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500. Comparatively, CNX Coal Resources has a beta of 1.48, meaning that its stock price is 48% more volatile than the S&P 500.

Summary

CNX Coal Resources beats Westmoreland Coal on 9 of the 15 factors compared between the two stocks.

About Westmoreland Coal

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.

About CNX Coal Resources

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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