CNX Coal Resources (CNXC) and Foresight Energy (NYSE:FELP) Critical Contrast

Foresight Energy (NYSE: FELP) and CNX Coal Resources (NYSE:CNXC) are both small-cap oils/energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitabiliy, valuation, analyst recommendations, risk, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of recent ratings for Foresight Energy and CNX Coal Resources, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Foresight Energy	0	1	0	0	2.00
CNX Coal Resources	0	1	5	0	2.83

Foresight Energy currently has a consensus price target of $5.25, suggesting a potential upside of 37.80%. CNX Coal Resources has a consensus price target of $21.60, suggesting a potential upside of 34.16%. Given Foresight Energy’s higher possible upside, equities research analysts plainly believe Foresight Energy is more favorable than CNX Coal Resources.

Institutional and Insider Ownership

11.5% of Foresight Energy shares are held by institutional investors. Comparatively, 60.8% of CNX Coal Resources shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

CNX Coal Resources pays an annual dividend of $2.05 per share and has a dividend yield of 12.7%. Foresight Energy does not pay a dividend. CNX Coal Resources pays out 134.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Foresight Energy has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500. Comparatively, CNX Coal Resources has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500.

Profitability

This table compares Foresight Energy and CNX Coal Resources’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Foresight Energy	-20.46%	-34.99%	-3.18%
CNX Coal Resources	11.26%	22.89%	7.21%

Earnings & Valuation

This table compares Foresight Energy and CNX Coal Resources’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
Foresight Energy	$940.14 million	0.31	$180.74 million	($1.90)	-2.01
CNX Coal Resources	$316.77 million	1.19	$95.25 million	$1.52	10.59

Foresight Energy has higher revenue and earnings than CNX Coal Resources. Foresight Energy is trading at a lower price-to-earnings ratio than CNX Coal Resources, indicating that it is currently the more affordable of the two stocks.

Summary

CNX Coal Resources beats Foresight Energy on 10 of the 14 factors compared between the two stocks.

About Foresight Energy

Foresight Energy LP is engaged in the mining and marketing of coal from reserves and operations located in the Illinois Basin. As of December 31, 2016, the Company controlled 2.1 billion tons of coal in the state of Illinois. Its reserves consist principally of three contiguous blocks of uniform, thick, high heat content (high Btu) thermal coal, which are used for longwall operations. The Company operates four underground mining complexes in the Illinois Basin, including Williamson, Sugar Camp, Hillsboro and Macoupin. Its mining complexes operate in the Illinois Basin with approximately two located in Southern Illinois and over two located in Central Illinois. Williamson, Sugar Camp and Hillsboro are longwall operations, and Macoupin is a continuous miner operation. The Company markets and sells its coal to electric utility and industrial companies in the eastern half of the United States as well as internationally (primarily into Europe).

About CNX Coal Resources

CNX Coal Resources LP is a producer of high-British thermal units (Btu) thermal coal in the Northern Appalachian Basin and the eastern United States. It is engaged in the management and development of coal operations of CONSOL Energy Inc. (CONSOL Energy) in Pennsylvania. It holds interest in, and operational control over, CONSOL Energy’s Pennsylvania Mining Complex, which consists of three underground mines and related infrastructure that produce high-Btu bituminous thermal coal that is sold primarily to electric utilities in the eastern United States. The Pennsylvania Mining Complex includes the Bailey Mine, the Enlow Fork Mine and the Harvey Mine. It mines its reserves from the Pittsburgh Number eight Coal Seam, which is a contiguous formation of uniform, Btu thermal coal. Its Bailey Mine is located in Enon, Pennsylvania. Its Enlow Fork Mine is located directly north of the Bailey Mine. Its Harvey Mine is located directly east of the Bailey and Enlow Fork Mines.