.png)
German (DE) 
English (US) 
Spanish (ES) 
French (FR) 
Hindi (IN) 
Italian (IT) 
Russian (RU) Exec-Edge
Tue, May 13, 2025, 7:41 AM 2 min read
In This Article:
Download the Complete Report Here
By Rayk Riechmann
As a leading natural resource firm based in heart of the US with an established domestic customer base, Alliance Resource Partners, L.P. (Nasdaq: ARLP) may offer the hedge against global trade uncertainty you have been looking for.
ARLP operates a portfolio of coal mining complexes in the Illinois Basin and Appalachia, making it the second-largest coal producer in the Eastern U.S. The firm’s unique vertically integrated business model includes prep plants, barge terminals, and loadouts. Offering tailored coal blends and flexible delivery options increases the perceived product quality and defends ARLP’s domestic market share.
Protection against economic uncertainty stems from an extensive multi-year contract book. With over 96% of expected sales volumes for 2025 already contractually committed, the firm’s exposure to spot price volatility and demand fluctuation is limited. Earnings are widely shielded against rising tariff policy concerns, with only 9.6% of committed sales coming from export markets and limited foreign input materials needed to maintain operations.
Best-in-class revenue diversification protects the top line against demand challenges amid a contracting domestic market. The legacy coal manufacturer has realized innovative value-creation opportunities within the Bitcoin industry, Oil & Gas royalty interests, EV infrastructure and tech solutions for mining and industrial firms. Management has shown a firm commitment to opportunistically exploring new industries while maintaining financial prudence with modest 0.6x net leverage.
Notably, 6.7% of sales are now generated through high-margin income from ownership interests in oil and gas mineral rights and royalties. Perhaps surprisingly, ARLP operates a crypto-mining and hosting venture that holds 513 bitcoin and monetizes underutilized electricity by running 3,500 miners.
Despite a challenging year, ARLP generated $383.5 million in FCF, underlining strong company fundamentals. Policy tailwinds under the Trump administration fuel optimism in the coal industry, which is expected to benefit hugely from rising energy demand for AI, Data Centers, and EVs. We believe that with its defensible business model and outstanding fundamentals, ARLP is positioned perfectly to capitalize on a favorable industry environment — marking a great entry point for growth investors. Even dividend investors get their money’s worth, as ARLP has paid out $4.4 billion in tax-efficient cash distributions over the last 25 years.
Comments