Our analysis is based on comparing Alliance Resource Partners LP with the following peers – Alliance Holdings GP, L.P., CONSOL Energy Inc., Natural Resource Partners L.P., Rhino Resource Partners LP, Westmoreland Resource Partners LP and Hallador Energy Co (AHGP-US, CNX-US, NRP-US, RHNO-US, WMLP-US and HNRG-US).
Alliance Resource Partners LP’s dividend yield is 7.61 percent and its dividend payout is 42.37 percent. This compares to a peer median dividend yield of 7.54 percent and a payout level of 38.10 percent. This type of dividend performance might make it a good stock for dividend investors. However, the company’s average dividend quality score of 50 out of a possible score of 100, points to some weakness in the sustainability of its robust payout ratio, and makes its less attractive for dividend investors seeking current income.
Dividend Quality Overview
- Over the last twelve months (prior to March 31, 2017), ARLP-US paid a high quality dividend, which represents a yield of 7.61% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during each of these years — of these 2 were high quality, 1 was medium quality and 2 were low quality.
- The ending cash balance is less than the last full year dividend payment and cannot be relied on to cushion any significant reduction of cash flows in the future.
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Over the last twelve months (prior to March 31, 2017), ARLP-US paid a high quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 3.77x), investing cash flow (coverage of -0.78x), issuance cash flow (coverage of -1.71x) and twelve-month prior cash (coverage of 0.14x), for a total dividend coverage of 1.41x.
ARLP-US‘s issuance cash flow includes outflows from net debt repayment (coverage of -1.70x).
These coverage ratio factors imply that the firm’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high dividend quality.
|Dividend Yield (%)||12.05||10.13||9.96||34.65||14.85||7.61|
|Dividend Payout (%)||68.01||62.88||51.83||126.18||58.63||42.37|
A complete list of metrics and analysis is available on the company page.
Alliance Resource Partners LP produces and markets coal to United States utilities and industrial users. It operates through the following segments: Illinois Basin, Appalachia, and Other and Corporate. The Illinois Basin segment is comprised of Webster County coal’s Dotiki mining complex, Gibson mining complex, which includes the Gibson north mine and the Gibson south project, Hopkins County coal’s Elk Creek mining complex, White County coal’s Pattiki mining complex, Warrior’s mining complex, River View’s mining complex, the Sebree property and certain properties of Alliance Resource Properties and ARP Sebree LLC. The Appalachian segment is composed of Pontiki and MC Mining complexes. The Other and Corporate segment includes marketing and administrative expenses, Mt. Vernon dock activities, coal brokerage activity, its equity investment in Mid-America Carbonates LLC and certain activities of Alliance Resource Properties. The company was founded in May 1999 and is headquartered in Tulsa, OK.
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