Alliance Resource Partners, L.P. (ARLP), Peabody Energy Corporation (BTU), Alpha Natural Resources, Inc. (ANR): Crushing Earnings Estimates Is Business-as-Usual For This Coal Stock

Coal volumes sold fell a staggering 19%. All told, these factors combined to result in a 28% drop in quarterly revenue.

Not surprisingly, shares of Alpha Natural Resources, Inc. (NYSE:ANR) declined 8% intra-day after its earnings announcement.

The icing on Alliance Resource’s cake: a large (and growing) yield

Peabody Energy Corporation (NYSE:BTU) at least pays its shareholders a dividend, which yields 2% at recent prices. On the subject of dividends, however, Alliance Resource Partners, L.P. (NASDAQ:ARLP) reigns supreme.

As previously mentioned, Alliance Resource Partners is an MLP, meaning it enjoys a favorable tax structure in exchange for distributing the vast majority of its earnings through to unitholders.

This is a huge win for both the company and its investors. And, making things even better, Alliance Resource Partners actually increases its dividend every quarter.

The company bumped up its distribution by 2% this quarter, and on a year-over-year basis, Alliance Resource Partner’s $4.61 per-unit distribution is 8.5% higher than it was this time last year.

The increased distribution represents the 21^st consecutive quarterly bump up in a row. Alliance Resource’s new payout represents a 6.1% yield at recent prices for new investors.

Consider the future income made possible by a 6% yielding stock with 8.5% annualized dividend growth. I’ve owned Alliance Resource Partners and have written several times about the company, recommending it for all investors. In the time I have owned units, my cost basis is down to $54.56 per share due to a low entry price and reinvestment of those fat distributions. With the new annualized payout of $4.61 per unit, my yield on cost is all the way up to 8.5%.

Foolish investors with a long time horizon can reap huge future rewards with Alliance Resource Partners, L.P. (NASDAQ:ARLP). The stock is quite simply a great buy.

The article Crushing Earnings Estimates Is Business-as-Usual For This Coal Stock originally appeared on Fool.com and is written by Robert Ciura.

Robert Ciura owns shares of Alliance Resource Partners, L.P.. The Motley Fool recommends Alliance Resource Partners, L.P. Robert is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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