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1. Company Snapshot

1.a. Company Description

Alliance Resource Partners, L.P., a diversified natural resource company, produces and markets coal primarily to utilities and industrial users in the United States.The company operates through four segments: Illinois Basin Coal Operations, Appalachia Coal Operations, Oil & Gas Royalties, and Coal Royalties.It produces a range of thermal and metallurgical coal with sulfur and heat contents.


The company operates seven underground mining complexes in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia.In addition, it leases land and operates a coal loading terminal on the Ohio River at Mt. Vernon, Indiana; and buys and resells coal, as well as owns mineral and royalty interests in approximately 1.5 million gross acres of oil and gas producing regions primarily in the Permian, Anadarko, and Williston Basins.Further, the company offers various mining technology products and services, including data network, communication and tracking systems, mining proximity detection systems, industrial collision avoidance systems, and data and analytics software.


As of December 31, 2021, it had approximately 547.1 million tons of proven and probable coal mineral reserves, as well as 1.17 billion tons of measured, indicated, and inferred coal mineral resources in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia.The company was founded in 1971 and is headquartered in Tulsa, Oklahoma.

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1.b. Last Insights on ARLP

Alliance Resource Partners, L.P.'s recent performance was negatively impacted by the company's decision to cut its dividend, reflecting a strategic pivot to address the long-term decline in coal demand and increasing regulatory pressures. The partnership's Q2 earnings report revealed a challenging environment, with management citing falling coal prices and shrinking profits as major headwinds. Stonegate Capital Partners recently updated its coverage on ARLP, likely assessing the partnership's prospects amidst the industry downturn. Additionally, ARLP was added to the Zacks Rank #5 (Strong Sell) List in June, indicating a negative outlook from analysts.

1.c. Company Highlights

2. Alliance Resource Partners Posts Strong Q4 2025 Earnings

Alliance Resource Partners reported adjusted EBITDA of $191.1 million, up 54.1% from 2024, driven by a decrease in segment adjusted EBITDA expense per ton sold. Net income attributable to ARLP was $82.7 million, or 64¢ per unit, compared to $16.3 million, or 12¢ per unit, in 2024. Total revenues were $535.5 million, down from $590.1 million in 2024, driven by lower coal sales and transportation revenues, partially offset by record oil and gas royalty volume. Earnings per share (EPS) came in at $0.75, beating analyst estimates of $0.61.

Publication Date: Feb -09

📋 Highlights
  • Adjusted EBITDA Surge: Jumped to $191.1M (54.1% YoY growth), driven by strong royalty performance and oil/gas production.
  • Coal Production Efficiency: 8.2M tons produced with 16.3% lower EBITDA per ton sold, reflecting improved operational efficiency.
  • Oil & Gas Royalty Growth: Revenue up 17.2% YoY, fueled by record BOE volumes and $14.4M in mineral acquisitions in Permian Delaware Basin.
  • 2026 Guidance: Coal sales volumes projected at 33.75–35.25M tons (+25% royalty tons), with pricing ranges of $50–$52 (Illinois Basin) and $66–$71 (Appalachia) per ton.
  • Liquidity & Balance Sheet Strength: $518.5M in liquidity, including $51.8M in Bitcoin, and leverage ratios reduced to 0.66x debt/EBITDA.

Operational Highlights

The company's coal production in the 2025 quarter was 8.2 million tons, with segment adjusted EBITDA expense per ton sold decreasing 16.3% from 2024. Illinois Basin coal sales volumes were 6.5 million tons, down approximately 2% compared to both 2024 and the sequential quarter. In Appalachia, coal sales volumes were 1.7 million tons, down from 1.8 and 2.1 million tons in 2024 and the sequential quarter, respectively.

Royalty Segments Drive Growth

The company's royalty segments delivered strong results during the 2025 quarter, with total revenue up 17.2% year over year due to higher coal royalty tons, higher revenue per ton sold, and record oil and gas BOE volumes. A high royalty interest multi-well development add in the Permian Delaware Basin was awaiting completion, and those wells were brought online during the 2025 quarter, resulting in flush production.

Outlook for 2026

For 2026, ARLP anticipates coal sales volumes to increase to 33.75 to 35.25 million tons, with coal royalty tons sold expected to be 6 million tons higher or 25% above 2025 level. The company also expects oil and gas royalty volumes to increase. Analysts estimate next year's revenue growth at 3.6%. With a current P/E Ratio of 10.06 and EV/EBITDA of -44.2, the market appears to be pricing in a relatively stable outlook for the company.

Valuation and Dividend Yield

The company's strong balance sheet and cash flows were also highlighted, with total on-net leverage ratios improving to 0.66 and 0.56x debt to trailing twelve months adjusted EBITDA. Total liquidity was $518.5 million. The Dividend Yield is 10.26%, indicating an attractive return for income investors. The company's commitment to a disciplined approach to investing in its coal and oil and gas royalty businesses is expected to drive future growth.

3. NewsRoom

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Golden Buying Opportunity: 8-9% Yields The Market Is Completely Ignoring

Feb -20

Source: seekingalpha.com

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Readers Spot 8 Ideal Buys Out Of 17 'Safer' Dividend Dogs In January

Feb -19

Source: seekingalpha.com

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Rep. Virginia Foxx Sells Hercules Capital, Inc. (NYSE:HTGC) Shares

Feb -10

Source: defenseworld.net

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Rep. Virginia Foxx Sells Public Storage (NYSE:PSA) Stock

Feb -10

Source: defenseworld.net

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14 Ideal 'Safer' Dividend Buys From 29 Of 69 February Graham Value All-Stars (GVAS)

Feb -06

Source: seekingalpha.com

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Alliance Resource: Betting On The Sustained Profitability Hike

Feb -05

Source: seekingalpha.com

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Alliance Resource Partners, L.P. Common Units (ARLP) Q4 2025 Earnings Call Transcript

Feb -02

Source: seekingalpha.com

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Alliance Resource Partners, L.P. Reports Fourth Quarter Financial and Operating Results; Declares Quarterly Cash Distribution of $0.60 Per Unit; and Provides 2026 Guidance

Feb -02

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.41%)

6. Segments

Illinois Basin

Expected Growth: 4.83%

The Illinois Basin's 4.83% growth is driven by Alliance Resource Partners' strategic expansion into high-demand markets, increased production efficiency, and favorable coal prices. Additionally, the basin's proximity to major transportation hubs and low-cost operations contribute to its growth. Furthermore, Alliance's diversified customer base and long-term contracts provide a stable revenue stream, supporting the segment's growth momentum.

Appalachia

Expected Growth: 3.63%

Appalachia's 3.63% growth from Alliance Resource Partners, L.P. is driven by increasing natural gas demand, proximity to high-growth markets, and low-cost operations. The region's abundant reserves, improved drilling efficiencies, and strategic infrastructure investments also contribute to its growth.

Oil & Gas

Expected Growth: 4.65%

Alliance Resource Partners, L.P.'s 4.65% growth in Oil & Gas is driven by increasing demand for energy, strategic acquisitions, and operational efficiencies. The partnership's diversified portfolio of oil and gas properties, combined with its focus on cost reduction and margin expansion, has enabled it to capitalize on favorable market conditions and drive growth.

Coal

Expected Growth: 4.83%

Alliance Resource Partners' 4.83% growth in coal segment is driven by increasing demand from utilities, strong operational performance, and strategic acquisitions. Additionally, the partnership's diversified customer base, favorable coal pricing, and cost control measures have contributed to its growth momentum.

Other, Corporate and Elimination

Expected Growth: 4.83%

Alliance Resource Partners, L.P.'s 4.83% growth is driven by Other segment's increased coal sales and pricing, Corporate segment's reduced operating expenses, and Elimination segment's improved intersegment eliminations, resulting from increased coal production and higher realized prices.

7. Detailed Products

Thermal Coal

Alliance Resource Partners, L.P. is a leading producer of thermal coal, which is used to generate electricity.

Metallurgical Coal

The company also produces metallurgical coal, which is used in the production of steel.

Coal Reserves

Alliance Resource Partners, L.P. owns and operates coal reserves, which are used to ensure a stable supply of coal.

Mineral Reserves

The company also owns and operates mineral reserves, which are used to extract minerals such as limestone and sand.

Oil and Gas

Alliance Resource Partners, L.P. also explores and produces oil and gas, which are used as energy sources.

8. Alliance Resource Partners, L.P.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Alliance Resource Partners, L.P. is medium due to the availability of alternative energy sources such as wind and solar power.

Bargaining Power Of Customers

The bargaining power of customers for Alliance Resource Partners, L.P. is low due to the company's strong market position and limited customer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Alliance Resource Partners, L.P. is medium due to the company's dependence on a few key suppliers for coal production.

Threat Of New Entrants

The threat of new entrants for Alliance Resource Partners, L.P. is low due to the high barriers to entry in the coal mining industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for Alliance Resource Partners, L.P. is high due to the competitive nature of the coal mining industry, with many established players vying for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 15.53%
Debt Cost 9.72%
Equity Weight 84.47%
Equity Cost 9.72%
WACC 9.72%
Leverage 18.38%

11. Quality Control: Alliance Resource Partners, L.P. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Value: 6.0

Growth: 5.6

Quality: 9.6

Yield: 9.0

Momentum: 3.5

Volatility: 8.0

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Alliance Resource Partners

A-Score: 6.6/10

Value: 7.4

Growth: 4.7

Quality: 5.9

Yield: 10.0

Momentum: 2.5

Volatility: 9.0

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Value: 7.7

Growth: 8.1

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Yield: 10.0

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Peabody Energy

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Value: 6.7

Growth: 3.7

Quality: 4.1

Yield: 1.0

Momentum: 8.5

Volatility: 3.3

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Arch Resources

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Value: 2.4

Growth: 7.3

Quality: 4.2

Yield: 5.0

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CONSOL Energy

A-Score: 4.3/10

Value: 7.4

Growth: 6.3

Quality: 3.7

Yield: 1.0

Momentum: 2.0

Volatility: 5.3

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

26.25$

Current Price

26.25$

Potential

-0.00%

Expected Cash-Flows