The coal industry remains a major supplier to key industries such as steelmakers and utilities with coal-fired electricity plants, despite growing global awareness of climate change and moves to reduce use of coal, one of the world's most plentiful fossil fuels. Companies like Arch Coal Inc. (ARCH) and Teck Resources Ltd. (TECK) mine, process, and distribute coal for electricity generation. Over the 12-month trailing period, the coal industry as represented by the VanEck Vectors Coal ETF (KOL) has dramatically underperformed the market, falling 27.3%, as compared with the S&P 500, which has seen its price grow by 25.8%. All figures are as of January 15, 2020.
Below, we'll examine the top three stocks in the coal industry for best value, fastest earnings growth, and most momentum.
Best Value Coal Stocks
Here are the coal stocks in the S&P 500 with the lowest 12-month trailing price-to-earnings (P/E) ratio in the sector. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.
|Best Value Coal Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Warrior Met Coal Inc. (HCC)||23.09||1.2||1.8|
|Peabody Energy Corp. (BTU)||8.43||0.8||3.0|
|CONSOL Energy Inc. (CEIX)||11.82||0.3||3.2|
- Warrior Met Coal Inc.: Warrior Met Coal is a producer and exporter of metallurgical coal. Its primary client base includes blast furnace steel producers spread across Europe, South America, and Asia. In Q3 2019, Warrior Met Coal's sales volume and production volume each increased by 19% year-over-year (YOY).
- Peabody Energy Corp.: Peabody Energy mines and sells low-sulfur coal for use in electricity generation. The company has mining operations across the U.S. and in Australia.
- CONSOL Energy Inc: CONSOL Energy has mining operations in the Northern Appalachian Basin. The company produces and exports bituminous thermal and crossover metallurgical coal. In Q3 2019, CONSOL managed to grow revenues by 3%.
Fastest Growing Coal Stocks
Here are the coal stocks in the S&P 500 with the highest year-over-year earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Coal Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|NACCO Industries (NC)||48.51||0.3||10.5|
|Arch Coal Inc. (ARCH)||69.30||1.0||3.9|
|China Shenhua Energy Co. Ltd. (CSUAY)||7.90||48.2||1.2|
- NACCO Industries Inc.: Holding company NACCO Industries mines coal through a number of subsidiaries. In November 2019, NACCO Industries announced a quarterly dividend of $0.19 along with a stock repurchase program.
- Arch Coal Inc.: Arch Coal is a top producer of thermal and metallurgical coal from surface and underground mines. The company has mining locations across the U.S. In Q3 2019, Arch Coal bought back 1.2 million shares of stock.
- China Shenhua Energy Co. Ltd.: China Shenhua Energy is the leading publicly listed coal company in China. The company and its subsidiaries are engaged mainly in the production and sale of coal and electricity, as well as railway, port and shipping transportation.
Coal Stocks with the Most Momentum
These are the coal stocks in the S&P 500 that had the greatest price increase over the past 12 months. Notably, there was only one coal industry stock with a positive 12-month trailing price change.
|Coal Stocks With the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Price Change (%)|
|NACCO Industries Inc. (NC)||48.11||0.3||27.1|
|VanEck Vectors Coal ETF (KOL)||N/A||N/A||-27.3|
|S&P 500 (SPY)||N/A||N/A||25.8|
- NACCO Industries Inc.: See company description above.
Warrior Met Coal, Inc. "Warrior Met Coal Announces Third Quarter 2019 Results," Accessed Jan. 16, 2020.
CONSOL Energy, Inc. "CONSOL Energy Announces Results for the Third Quarter 2019," Accessed Jan. 16, 2020.
NACCO Industries, Inc. "NACCO Industries Declares Quarterly Dividend and Announces Stock Repurchase Program," Accessed Jan. 16, 2020.
Arch Coal, Inc. "Arch Coal, Inc. Reports Third Quarter 2019 Results," Accessed Jan. 16, 2020.