Critical Contrast: Cloud Peak Energy (CLD) & Alliance Resource Partners, L.P. (ARLP)

Cloud Peak Energy (NYSE: CLD) and Alliance Resource Partners, L.P. (NASDAQ:ARLP) are both oils/energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Valuation & Earnings

This table compares Cloud Peak Energy and Alliance Resource Partners, L.P.’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cloud Peak Energy $841.33 million 0.31 $118.87 million ($0.03) -115.63
Alliance Resource Partners, L.P. $1.94 billion 1.27 $713.15 million $4.13 4.58

Alliance Resource Partners, L.P. has higher revenue and earnings than Cloud Peak Energy. Cloud Peak Energy is trading at a lower price-to-earnings ratio than Alliance Resource Partners, L.P., indicating that it is currently the more affordable of the two stocks.

Dividends

Alliance Resource Partners, L.P. pays an annual dividend of $2.00 per share and has a dividend yield of 10.6%. Cloud Peak Energy does not pay a dividend. Alliance Resource Partners, L.P. pays out 48.4% of its earnings in the form of a dividend.

Insider and Institutional Ownership

81.1% of Cloud Peak Energy shares are owned by institutional investors. Comparatively, 15.1% of Alliance Resource Partners, L.P. shares are owned by institutional investors. 2.5% of Cloud Peak Energy shares are owned by insiders. Comparatively, 44.0% of Alliance Resource Partners, L.P. shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Cloud Peak Energy has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500. Comparatively, Alliance Resource Partners, L.P. has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500.

Profitability

This table compares Cloud Peak Energy and Alliance Resource Partners, L.P.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cloud Peak Energy -0.47% 0.54% 0.31%
Alliance Resource Partners, L.P. 19.47% 34.60% 17.36%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Cloud Peak Energy and Alliance Resource Partners, L.P., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cloud Peak Energy 0 7 2 0 2.22
Alliance Resource Partners, L.P. 0 1 3 0 2.75

Cloud Peak Energy currently has a consensus target price of $5.29, indicating a potential upside of 52.33%. Alliance Resource Partners, L.P. has a consensus target price of $27.75, indicating a potential upside of 46.83%. Given Cloud Peak Energy’s higher probable upside, research analysts plainly believe Cloud Peak Energy is more favorable than Alliance Resource Partners, L.P..

Summary

Alliance Resource Partners, L.P. beats Cloud Peak Energy on 11 of the 15 factors compared between the two stocks.

Cloud Peak Energy Company Profile

Cloud Peak Energy Inc. is a producer of coal in the United States of America and the Powder River Basin (PRB). In the PRB, the Company owns and operates three surface coal mines: the Antelope Mine, the Cordero Rojo Mine and the Spring Creek Mine. Its segments include Owned and Operated Mines, and Logistics and Related Activities. Its Owned and Operated Mines segment includes its Antelope Mine, Cordero Rojo Mine, and Spring Creek Mine. The Logistics and Related Activities segment includes the services it provides to its international and certain of its domestic customers where it delivers coal to the customer at a terminal or the customer’s plant or other delivery point, remote from its mine site. As of December 31, 2016, the Company also operated two development projects, both located in the Northern PRB: Youngs Creek Project and Big Metal Project. The Company’s Antelope Mine and Cordero Rojo Mine are located in Wyoming and its Spring Creek Mine is located in Montana.

Alliance Resource Partners, L.P. Company Profile

Alliance Resource Partners, L.P. is a producer and marketer of coal primarily to the United States utilities and industrial users. The Company operates through segments, including Illinois Basin, Appalachia, and Other and Corporate. The Illinois Basin segment consists of various operating segments, including Webster County Coal, LLC’s Dotiki mining complex, Gibson County Coal, LLC’s mining complex, which includes the Gibson North mine and Gibson South mine, Hopkins County Coal, LLC’s mining complex, which includes the Elk Creek mine, the Pleasant View surface mineable reserves and the Fies property, White County Coal, LLC’s, Pattiki mining complex, Warrior Coal, LLC’s mining complex, Sebree Mining, LLC’s mining complex, which includes the Onton mine and River View Coal, LLC mining complex. The Appalachia segment consists of multiple operating segments, including the Mettiki mining complex, the Tunnel Ridge mining complex and the MC Mining mining complex.

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