# Alliance Resource Partners (ARLP): A 9.6% Covered Yield From Coal — Income Gem or Value Trap?

Page: https://stenobird.com/podcast/charged-alpha-stock-encyclopedia-7819792/alliance-resource-partners-arlp-a-9-6-covered-yield-from-coal-income-gem-or-value-trap
Text version: https://stenobird.com/podcast/charged-alpha-stock-encyclopedia-7819792/alliance-resource-partners-arlp-a-9-6-covered-yield-from-coal-income-gem-or-value-trap.md
Podcast: [Charged Alpha Stock Encyclopedia](https://stenobird.com/podcast/charged-alpha-stock-encyclopedia-7819792)
Published: 2026-07-27T14:05:27+00:00
Episode link: https://chargedalpha.podbean.com/e/alliance-resource-partners-arlp-a-96-covered-yield-from-coal-%e2%80%94-income-gem-or-value-trap/
Audio file: https://mcdn.podbean.com/mf/web/zce9npcbzprei45d/audio_h.mp3
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Duration seconds: 829

## Resource

Alliance Resource Partners, L.P. (ARLP) Q2 2026 — Alliance Resource Partners (ARLP), one of the largest coal producers in the eastern US and a growing oil & gas mineral-royalties MLP, reported Q2 2026 (quarter ended June 30, 2026) before the open on July 27: net income rose 33.9% YoY to $79.6M, or $0.61 per LP unit (vs $0.46), on revenue of $551.6M (+0.7% YoY, a slight beat). Adjusted EBITDA climbed 14.7% to $185.7M and distributable cash flow jumped 39% sequentially to $108.2M, lifting distribution coverage to 1.39x. The board declared a $0.60/unit quarterly distribution ($2.40 annualized), a ~9.6% yield at the ~$24.91 unit price. Coal sales rose to 8.56M tons (+8.9% sequentially) at $54.87/ton (-5.3% YoY), while oil & gas royalty revenue hit a record $46.3M (+30.5% YoY). The balance sheet is a fortress for a coal name: 0.67x net leverage, $424M liquidity, plus 646 bitcoins ($37.9M). On July 1 ARLP closed a $206.2M acquisition of AllDale III & IV oil & gas mineral interests (48,500 net royalty acres), pushing cumulative royalty investment past $1.0B. FY26 guidance: 33.75-35.25M coal tons at $54-56/ton (34.3M already committed & priced), capex $280-300M. Our yield-anchored DCF on ~$400M/yr distributable cash flow lands fair value near $26.50 — only ~6% above the price, so the return is the ~9.6% covered yield, not appreciation. Our call: HOLD, 3/5 — own it for the income, not the price. Wall Street coverage is thin; the ~$30 avg target / Buy lean (per public aggregators) implies ~20%, so we DIFFER, more cautious on price appreciation given coal's secular decline and ESG discount. Alliance Resource Partners (ARLP) is one of the most unusual names in the market — a coal company most investors are told to avoid, that just handed owners a near-10% distr…

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