NACCO Industries (NYSE:NC) and Arch Resources (NYSE:ARCH) –

NACCO Industries (NYSE:NC – Get Rating) and Arch Resources (NYSE:ARCH – Get Rating) are both oils/energy companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.

Dividends

NACCO Industries pays an annual dividend of $0.83 per share and has a dividend yield of 1.6%. Arch Resources pays an annual dividend of $1.00 per share and has a dividend yield of 0.6%. NACCO Industries pays out 11.6% of its earnings in the form of a dividend. Arch Resources pays out 3.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. NACCO Industries has raised its dividend for 38 consecutive years. NACCO Industries is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares NACCO Industries and Arch Resources’ net margins, return on equity and return on assets.

Analyst Ratings

This is a breakdown of current recommendations for NACCO Industries and Arch Resources, as reported by MarketBeat.

Arch Resources has a consensus target price of $152.00, indicating a potential downside of 10.65%. Given Arch Resources’ higher probable upside, analysts clearly believe Arch Resources is more favorable than NACCO Industries.

Institutional and Insider Ownership

50.3% of NACCO Industries shares are owned by institutional investors. 40.7% of NACCO Industries shares are owned by company insiders. Comparatively, 8.0% of Arch Resources shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

NACCO Industries has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500. Comparatively, Arch Resources has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500.

Valuation & Earnings

This table compares NACCO Industries and Arch Resources’ top-line revenue, earnings per share (EPS) and valuation.

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

NACCO Industries Company Profile (Get Rating)

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.

Arch Resources Company Profile (Get Rating)

Arch Resources, Inc. produces and sells thermal and metallurgical coal from surface and underground mines. As of December 31, 2021, the company operated seven active mines. It also owned or controlled primarily through long-term leases approximately 28,292 acres of coal land in Ohio; 952 acres of coal land in Maryland; 10,095 acres of coal land in Virginia; 306,033 acres of coal land in West Virginia; 81,470 acres of coal land in Wyoming; 234,543 acres of coal land in Illinois; 33,047 acres of coal land in Kentucky; 362 acres of coal land in Montana; 248 acres of coal land in Pennsylvania; and 19,018 acres of coal land in Colorado, as well as smaller parcels of property in Alabama, Indiana, Washington, Arkansas, California, Utah, and Texas. The company sells its products to utility, industrial, and steel producers in the United States, Europe, Asia, Central and South America, and Africa. The company was formerly known as Arch Coal, Inc. and changed its name to Arch Resources, Inc. in May 2020. Arch Resources, Inc. was incorporated in 1969 and is headquartered in St. Louis, Missouri.

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