Reviewing Ramaco Resources (NASDAQ:METCB) and Alliance Resource Partners (NASDAQ:ARLP)

Ramaco Resources (NASDAQ:METCB) and Alliance Resource Partners (NASDAQ:ARLP) are both energy companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Ramaco Resources and Alliance Resource Partners, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ramaco Resources	0	0	0	0	0.00
Alliance Resource Partners	0	0	1	0	3.00

Alliance Resource Partners has a consensus target price of $29.00, indicating a potential upside of 26.03%. Given Alliance Resource Partners’ stronger consensus rating and higher possible upside, analysts clearly believe Alliance Resource Partners is more favorable than Ramaco Resources.

Profitability

This table compares Ramaco Resources and Alliance Resource Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ramaco Resources	-3.17%	-5.70%	-2.94%
Alliance Resource Partners	10.30%	14.27%	9.04%

Insider & Institutional Ownership

9.6% of Ramaco Resources shares are held by institutional investors. Comparatively, 18.1% of Alliance Resource Partners shares are held by institutional investors. 16.8% of Alliance Resource Partners shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Ramaco Resources and Alliance Resource Partners”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ramaco Resources	$666.29 million	1.35	$11.19 million	($0.46)	-35.33
Alliance Resource Partners	$2.45 billion	1.21	$360.86 million	$1.81	12.71

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

Dividends

Ramaco Resources pays an annual dividend of $0.72 per share and has a dividend yield of 4.4%. Alliance Resource Partners pays an annual dividend of $2.40 per share and has a dividend yield of 10.4%. Ramaco Resources pays out -156.5% of its earnings in the form of a dividend. Alliance Resource Partners pays out 132.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Ramaco Resources has a beta of 0.9, meaning that its share price is 10% less volatile than the S&P 500. Comparatively, Alliance Resource Partners has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500.

Summary

Alliance Resource Partners beats Ramaco Resources on 13 of the 16 factors compared between the two stocks.

About Ramaco Resources

Ramaco Resources, Inc. engages in the development, operation, and sale of metallurgical coal. Its development portfolio includes the Elk Creek project that covers an area of approximately 20,200 acres located in southern West Virginia; the Berwind property covering an area of approximately 62,500 acres situated on the border of West Virginia and Virginia; the Knox Creek property, which covers an area of approximately 64,050 acres is located in Virginia; the Maben property covering an area of approximately 28,000 acres situated in southwestern Pennsylvania southern West Virginia; and the Brook Mine property that covers an area of approximately 16,000 acres located in northeastern Wyoming. The company serves blast furnace steel mills and coke plants in the United States, as well as metallurgical coal consumers internationally. Ramaco Resources, Inc. was founded in 2015 and is headquartered in Lexington, Kentucky.

About Alliance Resource Partners

Alliance Resource Partners, L.P., a diversified natural resource company, produces and markets coal primarily to utilities and industrial users in the United States. The company operates through four segments: Illinois Basin Coal Operations, Appalachia Coal Operations, Oil & Gas Royalties, and Coal Royalties. It produces a range of thermal and metallurgical coal with sulfur and heat contents. The company operates seven underground mining complexes in Illinois, Indiana, Kentucky, Maryland, Pennsylvania, and West Virginia. In addition, it owns and leases oil and gas mineral interests and equity interests; and leases its coal mineral reserves and resources to its mining complexes; and leases land and operates a coal loading terminal on the Ohio River at Mt. Vernon, Indiana. Further, the company offers various mining technology products and services, including data network, communication and tracking systems, mining proximity detection systems, industrial collision avoidance systems, and data and analytics software. It also exports its products. The company was founded in 1971 and is headquartered in Tulsa, Oklahoma.