Wednesday, March 30, 2022
Alliance Resource Partners (ARLP)
Cash Flow Above All Else
Alliance Resource Partners LP operates as a coal mining company based in the United States. It functions through threesegments; Illinois Basin, Appalachia, and and Minerals. The Illinois Basin activity comprises of underground mining complexes in Illinois, Indiana, Kentucky, Maryland and West Virginia and it makes up for most of the company’s revenue-generating operations. The Appalachia segment, on the other hand, consists of multiple operating segments, including the Mettiki mining complex, the Tunnel Ridge mining complex and the MC Mining mining complex. The Minerals segment includes oil & gas mineral interests held by AR Midland and AllDale I & II.
Mark Reichman, Senior Research Analyst of Natural Resources, Noble Capital Markets, Inc.
Refer to the full report for the price target, fundamental analysis, and rating.
Initiating coverage. Alliance Resource Partners is a diversified natural resource company that generates revenue from the production and marketing of coal, and royalty income from coal, oil, and gas mineral interests located in favorable producing regions across the United States. Strong cash flows generated by the company’s operations are expected to support continued growth in its oil and natural gas royalty business, along with diversification into green energy sources that may include strategic minerals and metals, electric vehicle charging infrastructure, wind, and/or solar.
Strong cash flow growth profile. Demand for coal, oil, and gas remains robust and prices have risen in recent quarters. Free cash flow in 2021 was $302.2 million, well above capital expenditures of $123 million. In 2021, Alliance paid down over $100 million of debt and recently increased its quarterly cash distribution to unitholders by 25% to $0.25 per unit, or $1.00 on an annualized basis …
This Company Sponsored Research is provided by Noble Capital Markets, Inc., a FINRA and S.E.C. registered broker-dealer (B/D).
*Analyst certification and important disclosures included in the full report. NOTE: investment decisions should not be based upon the content of this research summary. Proper due diligence is required before making any investment decision.
