Natural Resource Partners L.P. (NRP) | Investment Case

1. Company Snapshot

1.a. Company Description

Natural Resource Partners L.P., through its subsidiaries, owns, manages, and leases a portfolio of mineral properties in the United States.It operates through two segments, Mineral Rights and Soda Ash.The company owns interests in coal, soda ash, trona, and other natural resources.

Its coal reserves are primarily located in Appalachia, the Illinois Basin, and the Northern Powder River Basin in the United States; industrial minerals and aggregates properties are located in the United States; oil and gas properties located in Louisiana; timber assets located in West Virginia; and trona ore mining operation and soda ash refinery are located in the Green River Basin, Wyoming.The company leases a portion of its reserves in exchange for royalty payments; and owns and leases transportation and processing infrastructure related to coal properties.NRP (GP) LP serves as the general partner of the company.

Natural Resource Partners L.P. was incorporated in 2002 and is headquartered in Houston, Texas.

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1.b. Last Insights on NRP

Natural Resource Partners L.P.'s recent performance has been positively driven by its improving balance sheet and consistent cash flow, which are mitigating the impacts of weak commodity pricing. The partnership's debt decline has led to an upgrade to "Neutral" . Additionally, NRP's transition to a royalty-focused model and prudent capital allocation set the stage for double-digit yields and substantial unitholder returns. A recent merger announcement with Uplift Training aims to unify education, workforce development, and R&D under a single brand, potentially enhancing growth prospects.

1.c. Company Highlights

Last Price	104.69
Change Percentage	-0.20%
Open	104.97
Previous Close	104.9
Market Cap ( Millions)	1375
Volume	20026
Year High	113.03
Year Low	86.83
M A 50	104.67
M A 200	101.35

FCF Yield	13.62%
Dividend Yield	4.02%
ROE	34.19%
Debt / Equity	2.33%
Net Debt / EBIDTA	-9.70%
Price To Book	2.25
Price Earnings Ratio	9.28
Price To FCF	7.34
Price To sales	6.33
EV / EBITDA	7.86

2. NRP's Q3 2025 Earnings: A Resilient Performance Amidst Challenging Market Conditions

Natural Resource Partners L.P. reported a robust financial performance in the third quarter of 2025, despite significant headwinds in metallurgical coal, thermal coal, and soda ash markets. The company's net income came in at $31 million, with earnings per share (EPS) of $3.71, beating estimates of -$0.02. Revenue growth is expected to decline by 10.1% next year, according to analyst estimates. Operating cash flow was $41 million, and free cash flow was $42 million, demonstrating NRP's ability to generate cash despite challenging market conditions.

Publication Date: Nov -12

                                    📋 Highlights
                                    Free Cash Flow Resilience:
                                                Generated $42 million in Q3 2025 and $190 million over the last 12 months despite market challenges.
Debt Reduction Progress:
                                                Retired $130 million in debt over 12 months, leaving $70 million outstanding as of Q3.
Mineral Rights Performance:
                                                Produced $45 million in free cash flow, outperforming the partnership’s total FCF by $1 million.
Soda Ash Segment Decline:
                                                Net income dropped $11 million YoY due to depressed international sales prices.
Distribution Commitment:
                                                Paid $0.75 per common unit in Q3 and plans to raise distributions in August, contingent on market conditions.

                                

Segment Performance

The Mineral Rights segment was the bright spot, generating $41 million of net income, $44 million of operating cash flow, and $45 million of free cash flow. In contrast, the soda ash segment's net income decreased by $11 million compared to the prior year's third quarter, primarily due to lower international sales prices. The coal lessees are operating at or near their cost of production, which is a concern, but NRP's diversified portfolio and cost management helped mitigate the impact.

Capital Allocation and Debt Repayment

NRP remains committed to managing the partnership conservatively, prioritizing debt repayment and maintaining a solid capital structure. The company has made significant progress in retiring debt, with nearly $130 million of debt repaid over the past 12 months, leaving only $70 million outstanding. The company's goal is to establish a "fortress balance sheet" with no permanent debt and $30 million of cash on hand, which is expected to provide increased flexibility in capital allocation.

Valuation and Outlook

With a current P/E Ratio of 9.32 and an EV/EBITDA ratio of 7.88, NRP's valuation appears reasonable. The company's Free Cash Flow Yield is 13.57%, which is attractive, and the Dividend Yield is 4.01%. As NRP approaches a net cash position, likely within the next one to two quarters, the company's capital allocation options are expected to expand, potentially leading to increased unitholder distributions or opportunistic acquisitions. As Craig Nunez noted, significant capital investment would be needed to bring new thermal coal production online, process, and transport thermal coal, which could be a positive development for NRP if demand increases.

3. NewsRoom

Natural Resource Partners' Q3 Earnings Fall Y/Y on Weak Coal, Soda Ash

Nov -06

Source: zacks.com

Natural Resource Partners L.P. Common Units (NRP) Q3 2025 Earnings Call Transcript

Nov -04

Source: seekingalpha.com

Natural Resource Partners L.P. Reports Third Quarter 2025 Results and Declares Third Quarter 2025 Distribution of $0.75 per Common Unit

Nov -04

Source: globenewswire.com

Canadian Natural Resources (CNQ) Expected to Announce Quarterly Earnings on Thursday

Oct -30

Source: defenseworld.net

Natural Resource Partners L.P. Schedules Third Quarter 2025 Earnings Conference Call

Oct -21

Source: globenewswire.com

NRP Stone to Merge with and Rebrand as Uplift Training

Oct -01

Source: accessnewswire.com

Did Trump Just Save the Dying Coal Industry?

Sep -29

Source: 247wallst.com

NRP Upgraded to Neutral as Debt Decline Balances Pricing Pressures

Sep -16

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Coal, Royalty and Other

Expected Growth: 4.5%

Growing demand for electricity and industrial production drives coal segment growth. Royalty segment benefits from increasing oil and gas production. Diversified construction aggregates and oil and gas operations in the Other segment support overall growth.

Soda Ash

Expected Growth: 4.5%

Growing demand for glass and detergents, increasing adoption of eco-friendly products, and rising construction activities drive the soda ash market growth.

7. Detailed Products

Coal Royalty Interests

Natural Resource Partners L.P. owns and manages coal royalty interests in the United States, providing a steady stream of revenue from coal production.

Oil and Gas Interests

The company holds interests in oil and gas properties, providing a diversified revenue stream from hydrocarbon production.

Agricultural Lands

Natural Resource Partners L.P. owns and manages agricultural lands, leasing them to farmers and ranchers, generating rental income.

Hardwood Timber

The company owns and manages hardwood timberlands, harvesting and selling timber to wood products manufacturers.

Mineral Interests

Natural Resource Partners L.P. holds interests in mineral properties, generating revenue from mineral production and sales.

Real Estate

The company owns and manages commercial and industrial properties, leasing them to tenants, generating rental income.

8. Natural Resource Partners L.P.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Natural Resource Partners L.P. is medium due to the availability of alternative energy sources, but the company's diversified portfolio of natural resources reduces the impact.

Bargaining Power Of Customers

The bargaining power of customers is low for Natural Resource Partners L.P. as the company's products are essential for various industries, giving customers limited negotiating power.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium for Natural Resource Partners L.P. as the company relies on various suppliers for its operations, but its diversified portfolio and long-term contracts mitigate the impact.

Threat Of New Entrants

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

Intensity Of Rivalry

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

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	21.15%
Debt Cost	6.23%
Equity Weight	78.85%
Equity Cost	6.23%
WACC	6.23%
Leverage	26.82%

11. Quality Control: Natural Resource Partners L.P. passed 8 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

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

Alliance Resource Partners

A-Score: 7.4/10

Value: 8.6

Growth: 4.8

Quality: 7.1

Yield: 10.0

Momentum: 5.5

Volatility: 8.7

1-Year Total Return ->

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 ->

Dorian LPG

A-Score: 5.7/10

Value: 5.2

Growth: 6.8

Quality: 5.5

Yield: 10.0

Momentum: 2.5

Volatility: 4.3

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 ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-7.96%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.23%

Natural Resource Partners L.P. - US63900P6088

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on NRP

1.c. Company Highlights

Better Quality

Higher Yield

Strong Momentum

Medium Volatility

Stable Momentum

Expensive

Average Quality

2. NRP's Q3 2025 Earnings: A Resilient Performance Amidst Challenging Market Conditions

Segment Performance

Capital Allocation and Debt Repayment

Valuation and Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.50%)

6. Segments

Coal, Royalty and Other

Expected Growth: 4.5%

Soda Ash

Expected Growth: 4.5%

7. Detailed Products

Coal Royalty Interests

Oil and Gas Interests

Agricultural Lands

Hardwood Timber

Mineral Interests

Real Estate

8. Natural Resource Partners L.P.'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: Natural Resource Partners L.P. passed 8 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

104.69$

Current Price

104.69$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA