Wednesday, September 08, 2010

It's a Dirty Business but Someone's Got to Invest In It: Coal

Coal has taken a bad rap for many years, primarily due to the environmental impact of its use as a fuel. In spite of its adverse issues, it is still being heavily used. How much? Check out the following facts:

1. Coal is the largest single source of fuel in the world for the generation of electricity.
2. 75% of coal is used for the production of electricity.
3. The US consumes about one billion tons of coal each year.
4. China and India use about 1.7 billion tons annually.
5. Coal is the fastest growing energy source in the world.
6. China was the top producer of coal with almost one-third of the world's share.
7. US is the second largest producer of coal.
8. The largest exporter of coal is Australia.
9. Coal is found on all continents except Antarctica.
10. There is enough coal to provide the entire planet with all of its energy for 155 years, 285 years, or 600 years, depending on what source you use.

Here are several coal companies, all of which pay dividends.

Arch Coal Inc. (ACI) mines and sells low sulfur coal, with 2.9 billion tons of coal reserves and mining operations in Colorado, Kentucky, Utah, Virginia, West Virginia, and Wyoming. The P/E is 43 and the company generates a yield of 1.7%.

CONSOL Energy Inc. (CNX) mines and sells steam coal primarily to electric power generators. It is also in the business of producing metallurgical coal. The P/E is 17, and the yield is 1.2%.

Massey Energy Co. (MEE) produces, processes, and sells steam and metallurgical grade bituminous coal. The company recently reported negative earnings and the yield is 0.8%.

Peabody Energy Corp. (BTU) owns 40 coal operations in the United States and Australia, with about 10.2 billion tons in reserves.. This St. Louis, Missouri based company has been around since 1883. The stock has a P/E of 23 and it pays a small dividend of 0.6%.

Yanzhou Coal Mining Co. Ltd. (YZC) This Chinese company mines and sells coal in China and Australia. The stock has a P/E of 16. The stock yields 1.5% and has paid dividends annually for ten years.

If you like dividend stocks, such as electric and gas utilities, check out the dividend stock lists at

Author does not own any of the above.


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