Alliance Resource Partners L.P. Common Units representing Limited Partners Interests (ARLP)

FairStock Score: 78/100 — HIGH CONVICTION

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I look at Alliance Resource Partners as a cyclical thermal coal producer with royalty streams attached. In fiscal Q2 2026, the quarter ended 2026-06-30, it reported revenue of $551.6 million and net income of $79.6 million, up from revenue of $547.5 million and net income of $59.4 million in fiscal Q2 2025. That profit recovery is real, but the broader record is uneven: fiscal 2023 revenue was $2.6 billion and net income $630.1 million; fiscal 2024 revenue $2.4 billion and net income $360.9 million; fiscal 2025 revenue $2.2 billion and net income $311.2 million. So the latest quarter improved, yet the multi-year trend shows a commodity cycle and a shrinking top line. The balance sheet looks reasonable, with debt-to-equity of 0.33 and a Piotroski F-score of 8/9, and trailing free cash flow of $342.6 million gives a 10.6% FCF yield. The distribution yield is 9.27%, but that must be covered by cash flow. At $25.18 on 2026-10-13, the FairStock P/E is 12.28, P/B is 1.83, EV/EBITDA is 11.02, and the FairStock Graham Number is exactly $25.18, leaving zero margin of safety. ROE is 15.17%, though ROCE of 7.76% suggests capital intensity limits returns. The Lynch category is CYCLICAL — Thermal Coal, so earnings follow the economic cycle. As a Graham-style investor, I want to buy a dollar of value for fifty cents; here I am paying about fair value for a cyclical business. The low beta of 0.17 and high yield are attractive, but this is a decent cash generator, not a bargain.

In plain English: Alliance Resource Partners digs and sells coal mostly to power plants and industrial users, and it also earns royalties from coal and oil and gas. The latest quarter showed higher profit than a year earlier, and the company has moderate debt and strong cash flow, but sales have been roughly flat and profits are well below their earlier peak. At the recent price, the shares look close to fair based on the company's earnings and book value, with a high dividend but cyclical risks.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer