Natural Resource Partners (NYSE: NRP) and Hallador Energy (NASDAQ:HNRG) are both small-cap oils/energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, profitabiliy, analyst recommendations, valuation, institutional ownership, dividends and risk.
Profitability
This table compares Natural Resource Partners and Hallador Energy’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Natural Resource Partners | 22.86% | 62.10% | 6.01% |
| Hallador Energy | 5.06% | 13.69% | 5.62% |
Dividends
Natural Resource Partners pays an annual dividend of $1.80 per share and has a dividend yield of 6.4%. Hallador Energy pays an annual dividend of $0.16 per share and has a dividend yield of 2.3%. Natural Resource Partners pays out 30.5% of its earnings in the form of a dividend. Hallador Energy pays out 35.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Natural Resource Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Natural Resource Partners and Hallador Energy, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Natural Resource Partners | 0 | 2 | 0 | 0 | 2.00 |
| Hallador Energy | 0 | 0 | 1 | 0 | 3.00 |
Natural Resource Partners currently has a consensus price target of $33.00, indicating a potential upside of 17.65%. Hallador Energy has a consensus price target of $11.00, indicating a potential upside of 58.96%. Given Hallador Energy’s stronger consensus rating and higher probable upside, analysts clearly believe Hallador Energy is more favorable than Natural Resource Partners.
Risk and Volatility
Natural Resource Partners has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, Hallador Energy has a beta of -0.6, indicating that its share price is 160% less volatile than the S&P 500.
Insider & Institutional Ownership
21.7% of Natural Resource Partners shares are held by institutional investors. Comparatively, 57.0% of Hallador Energy shares are held by institutional investors. 39.0% of Natural Resource Partners shares are held by company insiders. Comparatively, 55.7% of Hallador Energy shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares Natural Resource Partners and Hallador Energy’s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Natural Resource Partners | $345.18 million | 0.99 | $189.12 million | $5.91 | 4.75 |
| Hallador Energy | $268.17 million | 0.76 | $78.09 million | $0.45 | 15.38 |
Natural Resource Partners has higher revenue and earnings than Hallador Energy. Natural Resource Partners is trading at a lower price-to-earnings ratio than Hallador Energy, indicating that it is currently the more affordable of the two stocks.
Summary
Natural Resource Partners beats Hallador Energy on 10 of the 16 factors compared between the two stocks.
About Natural Resource Partners
Natural Resource Partners L.P. owns, operates, manages and leases a portfolio of mineral properties in the United States, including interests in coal, trona and soda ash, construction aggregates and other natural resources. Coal Royalty and Other segment consists primarily of coal royalty and coal related transportation and processing assets. As of December 31, 2016, Soda Ash segment included the Company’s 49% non-controlling equity interest in Ciner Wyoming, a trona ore mining operation and soda ash refinery in the Green River Basin, Wyoming. VantaCore’s operating businesses include Laurel Aggregates, located in Lake Lynn, Pennsylvania; Winn Materials/McIntosh Construction, located in Clarksville, Tennessee; Grand Rivers, located in Grand Rivers, Kentucky, and Southern Aggregates, located near Baton Rouge, Louisiana.
About Hallador Energy
Hallador Energy Company is an oil and gas exploration company focused on developing coal reserves in the Illinois Basin. The Company, through its subsidiary, Sunrise Coal, LLC, is engaged in coal mining in the state of Indiana serving the electric power generation industry. Its projects include Carlisle Mine, Ace in the Hole Mine, Oaktown 1 Mine, Oaktown 2 Mine and Bulldog Mine. It develops over 10 million tons of coal annually and has customers in the mid-west and southeastern United States. It has over 40.6 million tons of the Indiana coal V seam. It also has over 69.3 million controlled tons in both Knox County, Indiana and Lawrence County, Illinois. Its Carlisle underground coal mine is located near the town of Carlisle, Indiana in Sullivan County. The Ace mine is located approximately 40 miles northeast of the Carlisle Mine. Its Bulldog Mine controls over 35.8 million tons of coal reserves.
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