Old King Coal: Will Coal Stocks Go Up Because of the US Backing Out of the Paris Accord?

According to the U.S. Energy Information Administration of the U. S. Department of Energy, 30% of the electricity generated in the United States comes from coal.

This is a significant source of fuel for generators, primarily due to its low energy production costs compared to natural gas and petroleum.

Some investors believe that the United States withdrawal from the Paris Agreement and the energy policies of the current administration should help coal stocks. If that happens, there are several American coal companies that could benefit.

Arch Coal (ARCH), which is headquartered in St. Louis, Missouri, was founded in 1969. The stock trades at 15.6 times forward earnings and pays a small yield of 0.5%. It has a favorable price sales ratio of 0.8. Revenues for the latest quarter jumped 45% year-over-year. Earnings per share went from a negative $9.71 to a positive $2.03 over the same period.

Cloud Peak Energy (CLD) is a low priced and low market cap stock, which is based in Gillette, Wyoming. The price to earnings ratio is a reasonable 5.4 and the price to sales ratio is an auspicious 0.3. The company does not pay a dividend.

Westmoreland Coal (WLB) has an even smaller market capitalization of $100 million. The company is based in Colorado Springs, Colorado, and is not currently generating positive earnings, nor does it pay a dividend.

Maybe coal can heat up your portfolio, but be careful, as many believe that the coal industry is a dying industry.

High Yield Utilities that can Benefit from Lower Fossil Fuel Prices

According to the U. S. Energy Information Administration, fossil fuels supply about 70 percent of the country's requirements for electricity generation. Currently the dominant fossil fuels used by the industry are coal, petroleum, and natural gas.

Many investors feel that the price of oil has peaked for now and is in a downtrend. Some analysts believe that due to the glut of natural gas and the recent major gas finds, that the price of gas will remain low for a while. The price of coal is much lower than it was in 2008. If this trend continues, investors could benefit from investing in utility stocks that use oil, gas, and/or coal as a major fuel source of electrical generation, since the cost savings for these companies should pass through to the bottom line. According to WallStreetNewsNetwork.com, there are around 30 electric utilities with yields above 4%. Many of these companies use fossil fuels as a significant source of fuel to generate electricity.

For example, Pinnacle West Capital Corp. (PNW) has one of the heaviest exposures, with approximately 31% of its electric energy coming from natural gas and oil. About 38% comes from coal and 27% from nuclear. This Phoenix, Arizona based electric utility trades at 14 times earnings and provides a generous yield of 5%. Earnings for the quarter ending September 30 were up 25%. The company reports its latest earnings February 18.

OGE Energy Corp. (OGE) has 38% of its energy coming from natural gas, with 60% from coal. The company serves the south central United States. The stock has a price to earnings ratio of 15 and a yield of 3.3%. Earnings for the quarter ending September 30 were up 19%. The company reports its latest earnings February 17.

Westar Energy Inc. (WR) generates about 7% of its energy from natural gas, with 78% from coal and 14% from nuclear. This utility, which serves Kansas, has a PE of 13.8 and a yield of 4.8%.

If you like utility stocks, you can find a free Excel database of utility stocks, which you can download, update and sort, at WallStreetNewsNetwork.com

Disclosure: Author did not own any of the above at the time the article was written.

By Stockerblog.com

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 WallStreetNewsNetwork.com.

Author does not own any of the above.

By Stockerblog.com.