By Joyce Ramirez

November 17, 2017 - Westmoreland Coal (NASDAQ: WLB) and NACCO Industries (NYSE:NC) are both small-cap oils/energy companies, but which is the better business? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, profitability, institutional ownership, dividends and valuation.

Risk and Volatility

Westmoreland Coal has a beta of 0.81, meaning that its stock price is 19% less volatile than the S&P 500. Comparatively, NACCO Industries has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500.

Insider & Institutional Ownership

76.3% of Westmoreland Coal shares are held by institutional investors. Comparatively, 49.3% of NACCO Industries shares are held by institutional investors. 1.4% of Westmoreland Coal shares are held by company insiders. Comparatively, 30.6% of NACCO Industries shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Westmoreland Coal and NACCO Industries’ net margins, return on equity and return on assets.

Dividends

NACCO Industries pays an annual dividend of $2.08 per share and has a dividend yield of 4.8%. Westmoreland Coal does not pay a dividend. NACCO Industries pays out 32.1% of its earnings in the form of a dividend. NACCO Industries has raised its dividend for 3 consecutive years.

Analyst Ratings

This is a summary of current ratings and recommmendations for Westmoreland Coal and NACCO Industries, as reported by MarketBeat.

Westmoreland Coal presently has a consensus price target of $6.00, indicating a potential upside of 259.28%. Given Westmoreland Coal’s higher possible upside, equities analysts plainly believe Westmoreland Coal is more favorable than NACCO Industries.

Valuation & Earnings

This table compares Westmoreland Coal and NACCO Industries’ revenue, earnings per share (EPS) and valuation.

NACCO Industries has higher revenue, but lower earnings than Westmoreland Coal. Westmoreland Coal is trading at a lower price-to-earnings ratio than NACCO Industries, indicating that it is currently the more affordable of the two stocks.

Summary

NACCO Industries beats Westmoreland Coal on 9 of the 15 factors compared between the two stocks.

Westmoreland Coal Company is an energy company. The Company operates through six segments: Coal-U.S., Coal-Canada, Coal-(WMLP), Power, Heritage and Corporate. The Coal-U.S. segment includes the operations of coal mines located in Montana, North Dakota, Ohio, Texas and New Mexico. The Coal-Canada segment includes the operations of coal mines located in Alberta and Saskatchewan. The Coal-WMLP segment includes the operations of Westmoreland Resource Partners, LP, a coal master limited partnership. The Power segment includes its Roanoke Valley Power Facility (ROVA) operations located in North Carolina. The Heritage segment includes the benefits it provides to former mining operation employees, as well as other administrative costs associated with providing those benefits and cost containment efforts. It produces and sells thermal coal primarily to investment grade utility customers under cost-protected contracts, as well as to industrial customers and barbeque briquettes manufacturers.

NACCO Industries, Inc. is a holding company. The Company’s principal business includes mining. The Company operates through the NACoal segment. The Company’s subsidiary includes The North American Coal Corporation (NACoal). The Company’s NACoal segment mines coal for use in power generation and provides mining services for other natural resources companies. Coal is surface mined from NACoal’s mines in North Dakota, Texas, Mississippi, Louisiana and the Navajo Nation in New Mexico. NACoal’s operating coal mining subsidiaries include Bisti Fuels Company, LLC (Bisti), Caddo Creek Resources Company, LLC (Caddo Creek), Camino Real Fuels, LLC (Camino Real), The Coteau Properties Company (Coteau), Coyote Creek Mining Company, LLC (Coyote Creek), Demery Resources Company, LLC (Demery), The Falkirk Mining Company (Falkirk), Liberty Fuels Company, LLC (Liberty), Mississippi Lignite Mining Company (MLMC) and The Sabine Mining Company (Sabine).