By Darrell McKinsey

December 17, 2018 - Westmoreland Resource Partners (NYSE:WMLP) and Arch Coal (NYSE:ARCH) are both oils/energy companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, risk, profitability, earnings and analyst recommendations.

Profitability

This table compares Westmoreland Resource Partners and Arch Coal’s net margins, return on equity and return on assets.

Analyst Recommendations

This is a breakdown of current ratings for Westmoreland Resource Partners and Arch Coal, as provided by MarketBeat.

Arch Coal has a consensus target price of $104.75, indicating a potential upside of 25.09%. Given Arch Coal’s higher probable upside, analysts plainly believe Arch Coal is more favorable than Westmoreland Resource Partners.

Institutional and Insider Ownership

0.4% of Westmoreland Resource Partners shares are held by institutional investors. Comparatively, 74.3% of Arch Coal shares are held by institutional investors. 2.0% of Westmoreland Resource Partners shares are held by insiders. Comparatively, 0.3% of Arch Coal shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Westmoreland Resource Partners pays an annual dividend of $0.12 per share and has a dividend yield of 5.8%. Arch Coal pays an annual dividend of $1.60 per share and has a dividend yield of 1.9%. Arch Coal pays out 14.1% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Westmoreland Resource Partners and Arch Coal’s revenue, earnings per share and valuation.

Arch Coal has higher revenue and earnings than Westmoreland Resource Partners.

Summary

Arch Coal beats Westmoreland Resource Partners on 7 of the 10 factors compared between the two stocks.

About Westmoreland Resource Partners

Westmoreland Resource Partners, LP, together with its subsidiaries, produces and markets thermal coal in the United States. The company also produces surface mined coal. It operates 1 surface mine in Wyoming; and 4 active mining complexes in Ohio comprising 13 surface mines. The company markets its coal to electric utilities with coal-fired power plants under coal sales contracts; and electric cooperatives, municipalities, and industrial customers in Wyoming, Kentucky, Michigan, Ohio, and West Virginia. Westmoreland Resources GP, LLC operates as the general partner of the company. The company was formerly known as Oxford Resource Partners, LP and changed its name to Westmoreland Resource Partners, LP in January 2015. The company was founded in 1985 and is based in Englewood, Colorado. Westmoreland Resource Partners, LP is a subsidiary of Westmoreland Coal Company.

About Arch Coal

Arch Coal, Inc. produces and sells thermal and metallurgical coal from surface and underground mines. As of December 31, 2017, the company operated 9 active mines located in Wyoming, West Virginia, Kentucky, Virginia, Colorado, and Illinois. It also owned or controlled, primarily through long-term leases, approximately 28,292 acres of coal land in Ohio; 1,060 acres of coal land in Maryland; 10,108 acres of coal land in Virginia; 359,160 acres of coal land in West Virginia; 98,488 acres of coal land in Wyoming; 267,857 acres of coal land in Illinois; 34,446 acres of coal land in Kentucky; 9,840 acres of coal land in Montana; 21,802 acres of coal land in New Mexico; 358 acres of coal land in Pennsylvania; and 20,165 acres of coal land in Colorado, as well as owned or controlled through long-term leases smaller parcels of property in Alabama, Indiana, Washington, Arkansas, California, Utah, and Texas. The company sells its products to utility, industrial, and steel producers in the United States and internationally. Arch Coal, Inc. was founded in 1969 and is headquartered in St. Louis, Missouri.