I have been thinking about this financial mess. I would have thought that the best place to be would be in things that have little to do with financials. For example, I hown KFT and CALM, two food companies. Hey, people got to eat right? So, they are doing ok. They pay a little dividend, people are going to eat, a good safe haven.
I would have thought ARLP and AHGP would be kind of the same. I mean, people aren't giving up on electricity. I live in Houston and I know what it is like without electricity, not pretty. So, you got ARLP and AHGP digging coal which is what over 50% of our electric supply is based on. They have nice long contract so any short term fluctuations in spot prices aren't going to kill them. They pay nice solid dividends. So, not a bad place to flee, I thought? And, yet, these stocks have gotten hammered. What, the market thinks that ARLP has subprime mortgages under the mattress? Man, I do not get this.
This post has a life. Lots of replies.
As we approach the ex dividend date, ARLP is rallying. I'm finally in the black after 5 weeks - see my post of Oct 8th. If we don't pull one of those sickening end-of-day freefalls it will be a good day. I'm thinking the street now thinks the dividend is secure.
One thing I like about ARLP - they don't make you wait for the divvies - pay date is only a fortnight or so after ex dividend date.
When some see market tank they panic and sell everything. I think today was the bottom when it was down nearly 700, did well coming up since then. I'd bet next week is up. Once the market levels off or starts rising again, I think OPEC will cut production and commidities will rise again. They had said they wouldn't sell oil below $80 and we are about there. With ARLPs long term contracts and utilities paying ARLP to start new PA mine, and ARLP with upcoming ability to sell more (beyond utilities) after PA's on line, earnings should be great= more dividend increases. How about this thought- you probably could buy all of USA's coal stocks for about $25 billion, about the annual interest uncle same pays China for $ we borrowed. With 1 years interest on our war debt, China could buy nearly 100% of our coal that makes half our electric. You couldn't even buy 1/10 of Google for that price. Coal's too cheap, and Sulfur emissions reduce global warming reflecting heat back to outerspace. If it dips more I'll buy more.
I for one feel that the dividend is not only secure, but that it will go to .70 this next quarter, payable on or about the 14th of November. Annualize that and you get $2.80 or 11%. What's more, I think it is going upward from there. JMHO. Best of luck longs.
I agree that electricity has to come from coal or nuke. The only risk I see is that when Obama wins the whitehouse, he is going to have a liberal democratic congress that is heavily controlled by the environmental lobby. Biden has already said no to coal. So, I could see a longterm environment that pushes the US away from coal to natural gas.
Of course, it would be economically stupid by so what Fannie Mae and Freddie Mac.
These guys would not start any project w/o 50% pre sold contracts.Ill coal was $22.00 this spring now $83.00.This stock will be a 3 bagger from here.Electric cars have to come from Nukes or coal
The market can remain irrational longer than a lot of people, myself included, can remain solvent. I'm in the same boat, down a lot of money. But this one has to be good over the long haul, and at least we've got a decent dividend coming in, and that is supposed to grow by 6 to 8% in sequential quarters. Keep the faith, better days are coming.
Well actually arlp holders can hold out indefinatly. ie: as long as the dividend is continued.
I tiptoed back in on 9-26 after having sold in the mid 40's. So I'm down, so what do I know? Not much, or at least what I do "know" is apparently wrong
How can high dividend coal stocks not be a good place to be? Well, not if you dislike wild swings.
I finally got one right and sold this after 40% gain in a few weeks. For what it’s worth to you I started buying it again yesterday, I’m hoping recent news and approaching dividend should hold this up.
We won't know for several months but perhaps this is just a great buying opportunity. At least I hope so - having just bought a modest number of shares - evidently too early.
The nagging worry I have is - does the market know something I don't? Did I try to catch a falling spear?