Alliance Resource Partners LP's Dividend Analysis
Delving into the Past, Present, and Future of Alliance Resource Partners LP's Dividend Performance
Alliance Resource Partners LP (NASDAQ:ARLP) recently announced a dividend of $0.7 per share, payable on 2023-11-14, with the ex-dividend date set for 2023-11-06. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's delve into Alliance Resource Partners LP's dividend performance and assess its sustainability.
What Does Alliance Resource Partners LP Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
Alliance Resource Partners LP operates as a coal mining company based in the United States. It has four segments: Illinois Basin, Appalachia, Oil & Gas Royalties and Coal Royalties. The Illinois Basin comprises underground mining complexes in Illinois, Indiana, Kentucky, Maryland, and West Virginia. The Appalachia segment comprises the Mettiki mining complex, the Tunnel Ridge mining complex, and the MC Mining mining complex. The Oil & Gas Royalties has oil & gas mineral interests held by AR Midland and AllDale I & II and includes Alliance Minerals' equity interests in both AllDale III and Cavalier Minerals. The Coal Royalties includes coal mineral reserves and resources owned or leased by Alliance Resource Properties.
A Glimpse at Alliance Resource Partners LP's Dividend History
Alliance Resource Partners LP has maintained a consistent dividend payment record since 1999. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Alliance Resource Partners LP's Dividend Yield and Growth
As of today, Alliance Resource Partners LP currently has a 12-month trailing dividend yield of 10.83% and a 12-month forward dividend yield of 11.67%. This suggests an expectation of increased dividend payments over the next 12 months.
Over the past three years, Alliance Resource Partners LP's annual dividend growth rate was -11.20%. Extended to a five-year horizon, this rate decreased to -19.80% per year. And over the past decade, Alliance Resource Partners LP's annual dividends per share growth rate stands at -12.30%.
Based on Alliance Resource Partners LP's dividend yield and five-year growth rate, the 5-year yield on cost of Alliance Resource Partners LP stock as of today is approximately 3.59%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Alliance Resource Partners LP's dividend payout ratio is 0.47.
Alliance Resource Partners LP's profitability rank offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Alliance Resource Partners LP's profitability 7 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 9 out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Alliance Resource Partners LP's growth rank of 7 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Alliance Resource Partners LP's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Alliance Resource Partners LP's revenue has increased by approximately 7.30% per year on average, a rate that underperforms than approximately 77.12% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Alliance Resource Partners LP's earnings increased by approximately 27.90% per year on average, a rate that underperforms than approximately 57.36% of global competitors.
Next Steps
Given Alliance Resource Partners LP's consistent dividend payments, its robust dividend yield, and its solid payout ratio, the company presents a compelling case for dividend-focused investors. However, its negative dividend growth rate over the past three, five, and ten years raises questions about the future growth of its dividends. With a profitability rank of 7 and a growth rank of 7, the company shows promise in terms of earnings and growth. However, its revenue and EPS growth rates lag behind many global competitors, indicating that there could be room for improvement. As always, potential investors should conduct thorough research and consider various factors before making investment decisions.
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
