Foresight Energy (NYSE: FELP) and Natural Resource Partners (NYSE:NRP) are both small-cap oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, profitability, valuation, risk, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares Foresight Energy and Natural Resource Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Foresight Energy -21.13% -15.37% -2.78%
Natural Resource Partners 25.25% 37.73% 4.19%

Analyst Recommendations

This is a breakdown of recent ratings for Foresight Energy and Natural Resource Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Foresight Energy 0 2 0 0 2.00
Natural Resource Partners 0 2 0 0 2.00

Foresight Energy currently has a consensus target price of $5.25, indicating a potential upside of 28.36%. Natural Resource Partners has a consensus target price of $30.50, indicating a potential upside of 22.98%. Given Foresight Energy’s higher probable upside, equities analysts plainly believe Foresight Energy is more favorable than Natural Resource Partners.

Dividends

Foresight Energy pays an annual dividend of $0.26 per share and has a dividend yield of 6.4%. Natural Resource Partners pays an annual dividend of $1.80 per share and has a dividend yield of 7.3%. Foresight Energy pays out -14.4% of its earnings in the form of a dividend. Natural Resource Partners pays out 54.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Valuation & Earnings

This table compares Foresight Energy and Natural Resource Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Foresight Energy $921.23 million 0.63 $186.23 million ($1.81) -2.26
Natural Resource Partners $319.23 million 0.95 $163.28 million $3.32 7.47

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

Institutional and Insider Ownership

11.7% of Foresight Energy shares are held by institutional investors. Comparatively, 20.6% of Natural Resource Partners shares are held by institutional investors. 39.0% of Natural Resource Partners shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Foresight Energy has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500. Comparatively, Natural Resource Partners has a beta of 0.66, indicating that its stock price is 34% less volatile than the S&P 500.

Summary

Natural Resource Partners beats Foresight Energy on 8 of the 13 factors compared between the two stocks.

Foresight Energy Company Profile

Foresight Energy LP is engaged in the mining and marketing of coal from reserves and operations located in the Illinois Basin. As of December 31, 2016, the Company controlled 2.1 billion tons of coal in the state of Illinois. Its reserves consist principally of three contiguous blocks of uniform, thick, high heat content (high Btu) thermal coal, which are used for longwall operations. The Company operates four underground mining complexes in the Illinois Basin, including Williamson, Sugar Camp, Hillsboro and Macoupin. Its mining complexes operate in the Illinois Basin with approximately two located in Southern Illinois and over two located in Central Illinois. Williamson, Sugar Camp and Hillsboro are longwall operations, and Macoupin is a continuous miner operation. The Company markets and sells its coal to electric utility and industrial companies in the eastern half of the United States as well as internationally (primarily into Europe).

Natural Resource Partners Company Profile

Natural Resource Partners L.P. owns, operates, manages and leases a portfolio of mineral properties in the United States, including interests in coal, trona and soda ash, construction aggregates and other natural resources. Coal Royalty and Other segment consists primarily of coal royalty and coal related transportation and processing assets. As of December 31, 2016, Soda Ash segment included the Company’s 49% non-controlling equity interest in Ciner Wyoming, a trona ore mining operation and soda ash refinery in the Green River Basin, Wyoming. VantaCore’s operating businesses include Laurel Aggregates, located in Lake Lynn, Pennsylvania; Winn Materials/McIntosh Construction, located in Clarksville, Tennessee; Grand Rivers, located in Grand Rivers, Kentucky, and Southern Aggregates, located near Baton Rouge, Louisiana.

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