Alliance Resource Partners, L.P. (ARLP), is the second largest coal producer in the Eastern U.S. and is poised to benefit from growing electricity demand in the region.
Coal demand has benefited from higher prices for natural gas, and further price increases are forecast.
Planned retirements of coal-fired power plants have been cancelled, driven by increasing power demand and shifts in U.S. government policy.
We forecast that higher demand for thermal coal and cancelled retirements will drive increased revenue and earnings for ARLP.
ARLP also owns a portfolio of oil and gas royalties, which diversifies its revenue stream and enhances its margins.
ARLP's metallurgical coal business saw lower results in 1H:25, with a recovery beginning in Q3.
Distributable cash flow fell in 2025, driving a cut in the quarterly distribution.
ARLP's distribution yield is well above peers.
