Yahoo Finance 3 Coal Stocks That Have Gained More Than 150% This Year
A decade ago, the Zacks Coal industry was ruling the global energy space. However, increasing concerns about emission, transition in the utility space, wide availability of natural gas and focus on the usage of clean energy have forced coal to take a backseat in the global energy supply mix.
Coal industry stocks have, nonetheless, staged a rebound courtesy of global demand after the pandemic-led lockdowns and surging natural gas prices. In the past year, the coal industry has gained 84.6% against the Zacks S&P 500 Composite’s decline of 20.2%.
The ongoing conflict between Russia and Ukraine and sanctions on Russian coal exports are creating fresh demand for coal in European nations. Rising coal imports in China, Japan and India, among others, is also pushing up coal prices. Demand for coal might continue to improve for the next few years as the pace of development of clean energy sources may not be able to fill the increase in energy demand.
What Helped Coal Stocks Sail Through the Year
Despite the primary drawback of emission, the inexpensive globally available coal is still a popular source of energy. Many utilities are utilizing coal as a backup fuel to produce electricity when cleaner energy sources, like solar or wind, fail to produce the desired volume of electricity due to weather conditions.
Coal is a reliable fuel source with huge reserves across the globe and can provide energy to all countries for a few hundred years. Coal has been used in various industries for heat content apart from electricity generation. Apart from the direct usage of coal, its byproducts are essential for various daily usages, like the production of water filters and air purifiers.
Riding on strong demand and positive sentiments, coal stocks like Peabody Energy BTU, CONSOL Energy CEIX and Hallador Energy Company HNRG, among others, have outperformed its industry in the year-to-date period. These companies are poised to continue the bull run in the new year.
Can Coal Remain Relevant as a Fuel Source?
Coal demand has declined over the past few years, and major coal companies operating in the United States incurred huge losses. Many have either shut down or are bankrupt. A few have emerged from bankruptcies and are now efficiently operating and competing with the clean energy source.
The greatest advantage of coal lies in its ability to provide uninterrupted energy to the user, irrespective of weather conditions. Wide availability, low prices and safe operations compared with operating clean sources like nuclear energy is an added advantage. Easy storage of coal in the area of usage ensures 24x7 production and provides energy security to the electricity producers.
The above factors indicate that coal will remain relevant as a fuel source in the future. We are hopeful that more investment will be made in carbon emission capture technology to realize the full value of coal, as global coal reserves will last much longer than crude oil and natural gas.
Coal Stocks Worth a Look
Using the Zacks Stocks Screener, we have zeroed in on three coal stocks that have gained more than 150% so far this year. These stocks carry either a Zacks Rank #2 (Buy) or 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Price Performance
Image Source: Zacks Investment Research
Peabody Energy: St Louis, MO-based Peabody Energy engages in the coal mining business and has both thermal and metallurgical operations. In 2021, nearly 26% of the company’s revenues were derived from five customers with whom it still has 17 coal supply agreements (excluding trading and brokerage transactions) expiring at various periods from 2022 to 2026. This assures a steady flow of revenues. Year to date, the company has returned 164.5%.
The Zacks Consensus Estimate for Peabody Energy’s 2022 earnings and revenues suggests a year-over-year rise of 118% and 37.5%, respectively. Peabody Energy currently carries a Zacks Rank #3.
CONSOL Energy: Canonsburg, PA-based CONSOL Energy, produces and exports bituminous thermal coal. The company owns and operates the Pennsylvania Mining Complex and the Baltimore Marine Terminal, and controls more than 1 billion tons of undeveloped reserves. The company is consistently operating longwalls and has one of the largest export terminals on the Eastern seaboard. Year to date, the company has returned 196.5%.
The Zacks Consensus Estimate for 2022 earnings and revenues suggests a year-over-year rise of 436.4% and 57.7%, respectively. Over the past 60 days, this company’s Zacks Consensus Estimate for 2022 and 2023 earnings has gone up 13.6% and 12.6%, respectively. CONSOL Energy currently carries a Zacks Rank #2.
Hallador Energy Company: Terre Haute, IN-based Hallador Energy, along with its subsidiaries, produces thermal coal for electric power generation. Hallador Energy continues to acquire and develop new mines and explore new opportunities as a provider of energy. Year to date, the company has returned 315.6%.
The Zacks Consensus Estimate for Hallador Energy’s 2022 earnings and revenues suggests a year-over-year rise of 50% and 34.4%, respectively. Hallador Energy currently carries a Zacks Rank #3.
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Peabody Energy Corporation (BTU) : Free Stock Analysis Report
Hallador Energy Company (HNRG) : Free Stock Analysis Report
Consol Energy Inc. (CEIX) : Free Stock Analysis Report
