Alpha Natural Resources, Inc. (ANR), Peabody Energy Corporation (BTU): Is Walter Energy, Inc. (WLT) a Buy?

Peabody Energy Corporation (NYSE:BTU) produces both bituminous and metallurgical coal. Peabody Energy Corporation (NYSE:BTU)’s bituminous coal operations are under pressure from falling natural gas prices. This is the result of glut of natural gas while its metallurgical coal operations are losing money from the Chinese slowdown. Unlike Alpha Natural Resources, Inc. (NYSE:ANR) or Walter Energy, however, analysts expect Peabody Energy Corporation (NYSE:BTU) to be profitable next year with an estimated profit of $0.64 per share. The company also pays a dividend of $0.34 for a yield of around 2% and has a stronger balance sheet than Walter with a long-term debt-to-equity ratio of 1.31.

Conclusion

If an investor had to buy coal shares now, however, Peabody Energy is the best bet. It is diversified enough to survive China’s slowdown and is the only company expected to make a profit in the future.

The article Is Walter Energy a Buy? originally appeared on Fool.com is written by Jason Bond.

Jason Bond has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

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