By Joyce Ramirez

November 19, 2017 - NACCO Industries (NYSE: NC) and CNX Coal Resources (NYSE:CNXC) are both small-cap coal – nec companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, risk, analyst recommendations, profitability, valuation and dividends.

Dividends

NACCO Industries pays an annual dividend of $2.08 per share and has a dividend yield of 4.5%. CNX Coal Resources pays an annual dividend of $2.05 per share and has a dividend yield of 15.1%. NACCO Industries pays out 33.2% of its earnings in the form of a dividend. CNX Coal Resources pays out 148.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NACCO Industries has raised its dividend for 3 consecutive years.

Earnings and Valuation

This table compares NACCO Industries and CNX Coal Resources’ top-line revenue, earnings per share and valuation.

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

Institutional & Insider Ownership

49.3% of NACCO Industries shares are owned by institutional investors. Comparatively, 25.7% of CNX Coal Resources shares are owned by institutional investors. 30.6% of NACCO Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for NACCO Industries and CNX Coal Resources, as provided by MarketBeat.com.

CNX Coal Resources has a consensus price target of $20.20, suggesting a potential upside of 48.53%. 

Given CNX Coal Resources’ higher possible upside, analysts plainly believe CNX Coal Resources is more favorable than NACCO Industries.

Profitability

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

Summary

NACCO Industries beats CNX Coal Resources on 8 of the 15 factors compared between the two stocks.

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).

CNX Coal Resources LP is a producer of high-British thermal units (Btu) thermal coal in the Northern Appalachian Basin and the eastern United States. It is engaged in the management and development of coal operations of CONSOL Energy Inc. (CONSOL Energy) in Pennsylvania. It holds interest in, and operational control over, CONSOL Energy’s Pennsylvania Mining Complex, which consists of three underground mines and related infrastructure that produce high-Btu bituminous thermal coal that is sold primarily to electric utilities in the eastern United States. The Pennsylvania Mining Complex includes the Bailey Mine, the Enlow Fork Mine and the Harvey Mine. It mines its reserves from the Pittsburgh Number eight Coal Seam, which is a contiguous formation of uniform, Btu thermal coal. Its Bailey Mine is located in Enon, Pennsylvania. Its Enlow Fork Mine is located directly north of the Bailey Mine. Its Harvey Mine is located directly east of the Bailey and Enlow Fork Mines.