NACCO Industries, Inc. (NC) | Investment Case

1. Company Snapshot

1.a. Company Description

NACCO Industries, Inc., together with its subsidiaries, engages in the natural resources business.The company operates through three segments: Coal Mining, North American Mining, and Minerals Management.The Coal Mining segment operates surface coal mines under long-term contracts for power generation companies and an activated carbon producer in North Dakota, Texas, Mississippi, and Louisiana in the United States, as well as Navajo Nation in New Mexico.

The North American Mining segment provides value-added contract mining and other services for producers of aggregates, lithium, and other minerals; and contract mining services for independently owned mines and quarries in Florida, Texas, Arkansas, and Indiana.The Minerals Management segment is involved in the leasing of its royalty and mineral interests to third-party exploration and production companies, and other mining companies, which grants them the rights to explore, develop, mine, produce, market, and sell gas, oil, and coal.The company was founded in 1913 and is headquartered in Cleveland, Ohio.

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1.b. Last Insights on NC

NACCO Industries' recent performance was driven by a 24% revenue growth to $76.6 million and a 38% improvement in gross profit to $10.0 million in Q3 2025. The company's operating profit improved sequentially to $6.8 million. Additionally, the board authorized a $20 million share buyback program, permitting the purchase of up to 5.2% of its stock. A quarterly dividend of 25.25 cents per share was also declared, payable on December 15, 2025. Recent contract wins, including a 10-year limestone mining contract and a multi-year contract in the Florida Everglades, also contributed to the positive momentum.

1.c. Company Highlights

Last Price	48.36
Change Percentage	0.33%
Open	48.3
Previous Close	48.2
Market Cap ( Millions)	361
Volume	4375
Year High	53.88
Year Low	27.47
M A 50	44.66
M A 200	38.87

FCF Yield	-6.29%
Dividend Yield	2.04%
ROE	7.72%
Debt / Equity	25.09%
Net Debt / EBIDTA	105.78%
Price To Book	0.87
Price Earnings Ratio	11.48
Price To FCF	-15.89
Price To sales	1.36
EV / EBITDA	8.09

2. NACCO Industries' Q3 2025 Earnings: A Mixed Bag

NACCO Industries reported a third-quarter 2025 operating profit of $6.8 million, a significant improvement from the breakeven results in the second quarter, but down from $19.7 million in the prior year. The decrease was primarily due to the absence of a $13.6 million benefit from business interruption insurance recoveries in 2024. EBITDA increased to $12.5 million, up from $9.3 million in Q2. Actual EPS came out at $3, beating estimates of $1.98.

Publication Date: Nov -29

                                    📋 Highlights
                                    Operating Profit Decline::
                                                Q3 2025 profit fell to $6.8M from $19.7M YoY, mainly due to absence of a $13.6M insurance recovery in 2024.
EBITDA Growth::
                                                EBITDA rose to $12.5M in Q3, up from $9.3M in Q2, reflecting sequential improvement.
Contract Mining Strength::
                                                Tons delivered increased 20% YoY, with revenues up 22% and operating profit/EBITDA rising significantly.
Minerals & Royalties Boost::
                                                Operating profit and adjusted EBITDA rose due to higher equity investment earnings and royalty revenues.
Strong Liquidity Position::
                                                Total liquidity at $152M ($52.7M cash + $99.3M credit facility) with $80.2M debt outstanding.

                                

Segment Performance

The Utility Coal Mining segment faced challenges due to contractual pricing mechanics, affecting Mississippi Lignite Mining Company's results. However, the Contract Mining segment showed substantial improvements, with tons delivered growing 20% year-over-year and 3% sequentially. Revenues net of reimbursed costs rose 22%, driven by higher customer demand and increased parts sales. The Minerals and Royalties segment saw an increase in operating profit and adjusted EBITDA, primarily due to improved earnings from an equity investment and increased royalty revenues.

Balance Sheet and Liquidity

The company had total debt outstanding of $80.2 million and total liquidity of $152 million, consisting of $52.7 million of cash and $99.3 million of availability under its revolving credit facility. This provides a comfortable cushion for future investments and expenses.

Outlook and Growth Prospects

NACCO Industries forecasts up to $44 million in capital spending for the remainder of 2025 and up to $70 million in 2026, mostly earmarked for new business development. The company expects meaningful year-over-year improvements in both operating profit and net income in 2026. With a one-team approach to business development, the company is well-positioned to deliver sound fourth-quarter 2025 operating results with momentum building into 2026.

Valuation and Ratios

With a P/E Ratio of 11.45 and an EV/EBITDA of 8.07, the stock appears to be reasonably valued. The ROE of 7.72% and ROIC of 2.53% indicate a decent return on equity, although the latter is relatively low. The Net Debt / EBITDA ratio of 1.06 suggests a manageable debt burden. Overall, the valuation metrics suggest that the stock is fairly priced, but with potential for growth in 2026.

3. NewsRoom

NACCO Industries (NYSE:NC) Board Announces Stock Repurchase Plan

Nov -19

Source: defenseworld.net

NACCO INDUSTRIES DECLARES QUARTERLY DIVIDEND AND ANNOUNCES STOCK REPURCHASE PROGRAM

Nov -18

Source: prnewswire.com

Top 2 Energy Stocks You May Want To Dump This Month

Nov -13

Source: benzinga.com

NACCO Industries, Inc. (NC) Q3 2025 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

NACCO INDUSTRIES ANNOUNCES THIRD QUARTER 2025 RESULTS

Nov -05

Source: prnewswire.com

NORTH AMERICAN MINING® AWARDED MULTI-YEAR CONTRACT SUPPORTING EVERGLADES RESTORATION

Nov -04

Source: prnewswire.com

NACCO INDUSTRIES ANNOUNCES DATES OF 2025 THIRD QUARTER EARNINGS RELEASE AND CONFERENCE CALL

Oct -28

Source: prnewswire.com

Mitigation Resources of North America® Earns Reclamation Award

Oct -08

Source: prnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.73%)

6. Segments

North American Mining

Expected Growth: 4.5%

Growing demand for lignite coal in North America, increasing adoption of contract mining services, and NACCO Industries' strong market presence drive the growth of North American Mining's contract mining services.

Coal Mining

Expected Growth: 2.5%

Growing demand for metallurgical coal, increasing adoption of clean coal technologies, and rising industrial production are expected to drive the coal mining segment's growth.

Mineral Management

Expected Growth: 4.5%

Growing demand for coal and minerals, increasing industrial activities, and rising investments in mining infrastructure are expected to drive the growth of Mineral Management from NACCO Industries, Inc.

Unallocated Items

Expected Growth: 4.5%

Unallocated items from NACCO Industries, Inc. are expected to grow at a CAGR of 4.5% driven by increasing operational costs, investments in digital transformation, and rising administrative expenses.

Eliminations

Expected Growth: 4.5%

Eliminations from NACCO Industries, Inc. are expected to grow driven by increasing demand for consolidated financial statements, improved financial transparency, and enhanced regulatory compliance.

7. Detailed Products

North American Coal

Provides coal mining services for lignite and metallurgical coal to power generation and steel production companies

Hamilton Beach Mining

Operates surface coal mines in Mississippi, producing lignite coal for electricity generation

Mississippi Lignite Mining

Operates a lignite coal mine in Mississippi, supplying coal to a nearby power plant

Liberty Fuels

Develops and markets coal-based alternative fuels for industrial and transportation uses

Mitigation Resources of North America

Provides environmental mitigation services, including wetland and stream mitigation banking

NACCO and Subsidiaries

Provides management and administrative services to NACCO's subsidiaries

8. NACCO Industries, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for NACCO Industries, Inc. is medium due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers for NACCO Industries, Inc. is low due to the company's strong brand reputation and customer loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers for NACCO Industries, Inc. is medium due to the presence of multiple suppliers in the market.

Threat Of New Entrants

The threat of new entrants for NACCO Industries, Inc. is high due to the low barriers to entry in the industry.

Intensity Of Rivalry

The intensity of rivalry for NACCO Industries, Inc. is high due to the presence of several competitors in the market.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	8.90%
Debt Cost	8.03%
Equity Weight	91.10%
Equity Cost	8.03%
WACC	8.03%
Leverage	9.77%

11. Quality Control: NACCO Industries, Inc. passed 2 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Inefficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Natural Resource Partners

A-Score: 6.8/10

Value: 4.2

Growth: 5.6

Quality: 7.7

Yield: 9.0

Momentum: 6.5

Volatility: 8.0

1-Year Total Return ->

SunCoke Energy

A-Score: 6.3/10

Value: 8.7

Growth: 5.0

Quality: 4.8

Yield: 9.0

Momentum: 4.0

Volatility: 6.3

1-Year Total Return ->

NACCO

A-Score: 6.2/10

Value: 7.9

Growth: 3.3

Quality: 6.3

Yield: 5.0

Momentum: 9.5

Volatility: 5.3

1-Year Total Return ->

Ramaco Resources

A-Score: 5.3/10

Value: 5.4

Growth: 7.2

Quality: 3.2

Yield: 5.0

Momentum: 10.0

Volatility: 1.0

1-Year Total Return ->

American Resources

A-Score: 4.2/10

Value: 8.0

Growth: 3.2

Quality: 4.1

Yield: 0.0

Momentum: 10.0

Volatility: 0.0

1-Year Total Return ->

Hallador Energy

A-Score: 3.8/10

Value: 5.5

Growth: 1.4

Quality: 3.5

Yield: 0.0

Momentum: 10.0

Volatility: 2.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

32.73%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.03%

NACCO Industries, Inc. - US6295791031

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on NC

1.c. Company Highlights

Lower Quality

Cheaper

Weak Momentum

Lower Growth

Medium Volatility

Stable Momentum

Fairly Valued

Average Quality

Strong Momentum

Average Growth

2. NACCO Industries' Q3 2025 Earnings: A Mixed Bag

Segment Performance

Balance Sheet and Liquidity

Outlook and Growth Prospects

Valuation and Ratios

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.73%)

6. Segments

North American Mining

Expected Growth: 4.5%

Coal Mining

Expected Growth: 2.5%

Mineral Management

Expected Growth: 4.5%

Unallocated Items

Expected Growth: 4.5%

Eliminations

Expected Growth: 4.5%

7. Detailed Products

North American Coal

Hamilton Beach Mining

Mississippi Lignite Mining

Liberty Fuels

Mitigation Resources of North America

NACCO and Subsidiaries

8. NACCO Industries, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: NACCO Industries, Inc. passed 2 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

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

48.36$

Current Price

48.36$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA