Cloud Peak Energy (NYSE: CLD) and NACCO Industries (NYSE:NC) are both small-cap oils/energy companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, institutional ownership, analyst recommendations, earnings and profitability.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Cloud Peak Energy and NACCO Industries, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cloud Peak Energy 0 5 2 0 2.29
NACCO Industries 0 0 0 0 N/A

Cloud Peak Energy presently has a consensus target price of $5.17, indicating a potential upside of 25.10%. Given Cloud Peak Energy’s higher probable upside, research analysts clearly believe Cloud Peak Energy is more favorable than NACCO Industries.

Profitability

This table compares Cloud Peak Energy and NACCO Industries’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cloud Peak Energy N/A 0.39% 0.23%
NACCO Industries 6.75% 18.54% 7.13%

Insider and Institutional Ownership

80.5% of Cloud Peak Energy shares are owned by institutional investors. Comparatively, 49.3% of NACCO Industries shares are owned by institutional investors. 2.5% of Cloud Peak Energy shares are owned by insiders. Comparatively, 30.6% of NACCO Industries shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Cloud Peak Energy and NACCO Industries’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Cloud Peak Energy $800.44 million 0.39 $21.84 million $0.03 137.71
NACCO Industries $856.44 million 0.31 $29.60 million $6.48 6.00

NACCO Industries has higher revenue and earnings than Cloud Peak Energy. NACCO Industries is trading at a lower price-to-earnings ratio than Cloud Peak Energy, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Cloud Peak Energy has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500. Comparatively, NACCO Industries has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500.

Dividends

NACCO Industries pays an annual dividend of $2.08 per share and has a dividend yield of 5.4%. Cloud Peak Energy does not pay a dividend. NACCO Industries pays out 32.1% of its earnings in the form of a dividend. NACCO Industries has increased its dividend for 3 consecutive years.

Summary

NACCO Industries beats Cloud Peak Energy on 9 of the 16 factors compared between the two stocks.

About Cloud Peak Energy

Cloud Peak Energy Inc. is a producer of coal in the United States of America and the Powder River Basin (PRB). In the PRB, the Company owns and operates three surface coal mines: the Antelope Mine, the Cordero Rojo Mine and the Spring Creek Mine. Its segments include Owned and Operated Mines, and Logistics and Related Activities. Its Owned and Operated Mines segment includes its Antelope Mine, Cordero Rojo Mine, and Spring Creek Mine. The Logistics and Related Activities segment includes the services it provides to its international and certain of its domestic customers where it delivers coal to the customer at a terminal or the customer’s plant or other delivery point, remote from its mine site. As of December 31, 2016, the Company also operated two development projects, both located in the Northern PRB: Youngs Creek Project and Big Metal Project. The Company’s Antelope Mine and Cordero Rojo Mine are located in Wyoming and its Spring Creek Mine is located in Montana.

About NACCO Industries

NACCO Industries, Inc. is a holding company. The Company’s principal business includes mining. The Company operates through the NACoal segment. The Company’s subsidiary includes The North American Coal Corporation (NACoal). The Company’s NACoal segment mines coal for use in power generation and provides mining services for other natural resources companies. Coal is surface mined from NACoal’s mines in North Dakota, Texas, Mississippi, Louisiana and the Navajo Nation in New Mexico. NACoal’s operating coal mining subsidiaries include Bisti Fuels Company, LLC (Bisti), Caddo Creek Resources Company, LLC (Caddo Creek), Camino Real Fuels, LLC (Camino Real), The Coteau Properties Company (Coteau), Coyote Creek Mining Company, LLC (Coyote Creek), Demery Resources Company, LLC (Demery), The Falkirk Mining Company (Falkirk), Liberty Fuels Company, LLC (Liberty), Mississippi Lignite Mining Company (MLMC) and The Sabine Mining Company (Sabine).

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