Financial Survey: Westmoreland Coal (WLB) & Natural Resource Partners (NRP)
Westmoreland Coal (NASDAQ: WLB) and Natural Resource Partners (NYSE:NRP) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.
Insider and Institutional Ownership
78.3% of Westmoreland Coal shares are owned by institutional investors. Comparatively, 20.6% of Natural Resource Partners shares are owned by institutional investors. 1.4% of Westmoreland Coal shares are owned by insiders. Comparatively, 39.0% of Natural Resource Partners shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Natural Resource Partners pays an annual dividend of $1.80 per share and has a dividend yield of 7.2%. Westmoreland Coal does not pay a dividend. Natural Resource Partners pays out 54.2% of its earnings in the form of a dividend.
Earnings & Valuation
This table compares Westmoreland Coal and Natural Resource Partners’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Westmoreland Coal||$1.43 billion||0.03||$231.38 million||($5.54)||-0.40|
|Natural Resource Partners||$319.23 million||0.95||$163.28 million||$3.32||7.50|
Westmoreland Coal has higher revenue and earnings than Natural Resource Partners. Westmoreland Coal 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.
This is a summary of recent ratings for Westmoreland Coal and Natural Resource Partners, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Natural Resource Partners||0||2||0||0||2.00|
Westmoreland Coal presently has a consensus target price of $10.67, suggesting a potential upside of 376.19%. Natural Resource Partners has a consensus target price of $30.50, suggesting a potential upside of 22.49%. Given Westmoreland Coal’s stronger consensus rating and higher probable upside, equities analysts clearly believe Westmoreland Coal is more favorable than Natural Resource Partners.
This table compares Westmoreland Coal and Natural Resource Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Natural Resource Partners||25.25%||37.73%||4.19%|
Risk and Volatility
Westmoreland Coal has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, Natural Resource Partners has a beta of 0.66, suggesting that its stock price is 34% less volatile than the S&P 500.
Westmoreland Coal beats Natural Resource Partners on 8 of the 15 factors compared between the two stocks.
About Westmoreland Coal
Westmoreland Coal Company is an energy company. The Company operates through six segments: Coal-U.S., Coal-Canada, Coal-(WMLP), Power, Heritage and Corporate. The Coal-U.S. segment includes the operations of coal mines located in Montana, North Dakota, Ohio, Texas and New Mexico. The Coal-Canada segment includes the operations of coal mines located in Alberta and Saskatchewan. The Coal-WMLP segment includes the operations of Westmoreland Resource Partners, LP, a coal master limited partnership. The Power segment includes its Roanoke Valley Power Facility (ROVA) operations located in North Carolina. The Heritage segment includes the benefits it provides to former mining operation employees, as well as other administrative costs associated with providing those benefits and cost containment efforts. It produces and sells thermal coal primarily to investment grade utility customers under cost-protected contracts, as well as to industrial customers and barbeque briquettes manufacturers.
About Natural Resource Partners
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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