PVR and NRP are Two Coal Companies Singing, "I Will Survive" !!
Have to give President Obama great credit for going against coal..King Coal with its' acid rain,cancer clusters,sludge,cinders,and CO2 emissions has scored for so long because natural gas supplies were limited and nuclear was at a standstill after Three Mile Island hysteria. Shale gas is now the place to be. To the great credit of their mgmt teams, PVR and NRP are pivoting away from coal while still cashing in on coal exports and existing coal power plants to fund the transition. My main investments are in MLPs like MWE,GEL,APL,Paa,MMP,EPD, etc. However, I have invested in PVR and NRP thinking that their excellent distributions might continue while their coal interests fund the transition to other areas. When you think of India,Pakistan,and China ramping up in coal burning at an incredible rate to get desperately needed electrical energy, you know where a) the coal markets are and b) where pollution and global warming are centered. That the three countries have over one third of the world's population says that this coal usage is not going to be reversed anytime soon,either. It's kind of ironic,too, that the USA is now the World Leader in reducing CO2 emissions. We ignored the Kyoto Protocol, but the advent of shale gas has given us an amazing reduction in emissions. Germany and Japan, for example, are burning fossil fuels like crazy to replace nuclear facilities they are shutting down. So, let's hope that PVR and NRP keep on doing what looks like an excellent course of action.
One note about coal, there is a Norfolk Southern Line that runs about 1.5 miles from my house, where i walk in the evening. I've noticed recently that Coal cars are making up an increased percentage of the trains compared to earlier this year and last year. Hardly scientific research, but I think we saw the coal business stabilize in Q1 and I might expect a slight bump in Q2.
Just a followup, BTU reported a profit this quarter, vice an expected loss. Several of the coal companies are up 5-7% this morning. Kind of confirms my hope that the coal business shows a minor increase in earnings before Interest, taxes and Depreciation this quarter
awesome take on these 2 companies.....have held small position in pvr for years. Do you think pvr's current dividend can be maintained during the transition? I guess that's kind of the million $ question.
They kept distributions during the last crash and have raised for years. Management is solid, I doubt they would have increased it last time if they didn't think it was covered. Also I am not sure how things will play out once we start exporting lng. It actually could push up prices of nat gas here and then making coal more viable.