Alliance Holdings GP, L.P. (NASDAQ: AHGP) and Alliance Resource Partners, L.P. (NASDAQ:ARLP) are both oils/energy companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, risk, valuation and analyst recommendations.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for Alliance Holdings GP, L.P. and Alliance Resource Partners, L.P., as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Alliance Holdings GP, L.P. | 0 | 0 | 0 | 0 | N/A |
| Alliance Resource Partners, L.P. | 0 | 1 | 3 | 0 | 2.75 |
Alliance Resource Partners, L.P. has a consensus target price of $27.75, indicating a potential upside of 53.74%. Given Alliance Resource Partners, L.P.’s higher probable upside, analysts clearly believe Alliance Resource Partners, L.P. is more favorable than Alliance Holdings GP, L.P..
Earnings & Valuation
This table compares Alliance Holdings GP, L.P. and Alliance Resource Partners, L.P.’s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Alliance Holdings GP, L.P. | $1.94 billion | 0.80 | $710.69 million | $3.46 | 7.47 |
| Alliance Resource Partners, L.P. | $1.94 billion | N/A | $713.15 million | $4.13 | 4.37 |
Alliance Resource Partners, L.P. is trading at a lower price-to-earnings ratio than Alliance Holdings GP, L.P., indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
23.7% of Alliance Holdings GP, L.P. shares are held by institutional investors. Comparatively, 28.4% of Alliance Resource Partners, L.P. shares are held by institutional investors. 44.0% of Alliance Resource Partners, L.P. shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Dividends
Alliance Holdings GP, L.P. pays an annual dividend of $2.92 per share and has a dividend yield of 11.3%. Alliance Resource Partners, L.P. pays an annual dividend of $2.00 per share and has a dividend yield of 11.1%. Alliance Holdings GP, L.P. pays out 84.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Alliance Resource Partners, L.P. pays out 48.4% of its earnings in the form of a dividend.
Risk & Volatility
Alliance Holdings GP, L.P. has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, Alliance Resource Partners, L.P. has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500.
Profitability
This table compares Alliance Holdings GP, L.P. and Alliance Resource Partners, L.P.’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Alliance Holdings GP, L.P. | 10.69% | 19.15% | 9.62% |
| Alliance Resource Partners, L.P. | 19.47% | 34.60% | 17.36% |
Summary
Alliance Resource Partners, L.P. beats Alliance Holdings GP, L.P. on 11 of the 13 factors compared between the two stocks.
About Alliance Holdings GP, L.P.
Alliance Holdings GP, L.P. (AHGP) is a limited partnership company. The Company owns directly and indirectly the members’ interest in Alliance Resource Management GP, LLC (MGP), the managing general partner of Alliance Resource Partners, L.P. (ARLP). The Company’s segments include Illinois Basin, Appalachia, and Other and Corporate. The Illinois Basin segment consists of mining complexes, including Webster County Coal’s Dotiki mining complex; Gibson County Coal’s mining complex, which includes the Gibson North mine and Gibson South mine; Warrior’s mining complex; River View’s mining complex and the Hamilton mining complex. The Appalachia segment consists of various operating segments, including the Mettiki mining complex, the Tunnel Ridge mining complex and the MC Mining mining complex. The Mettiki mining complex includes Mettiki Coal (WV)’s Mountain View mine and Mettiki Coal’s preparation plant. Other and Corporate segment includes marketing and administrative activities.
About Alliance Resource Partners, L.P.
Alliance Resource Partners, L.P. is a producer and marketer of coal primarily to the United States utilities and industrial users. The Company operates through segments, including Illinois Basin, Appalachia, and Other and Corporate. The Illinois Basin segment consists of various operating segments, including Webster County Coal, LLC’s Dotiki mining complex, Gibson County Coal, LLC’s mining complex, which includes the Gibson North mine and Gibson South mine, Hopkins County Coal, LLC’s mining complex, which includes the Elk Creek mine, the Pleasant View surface mineable reserves and the Fies property, White County Coal, LLC’s, Pattiki mining complex, Warrior Coal, LLC’s mining complex, Sebree Mining, LLC’s mining complex, which includes the Onton mine and River View Coal, LLC mining complex. The Appalachia segment consists of multiple operating segments, including the Mettiki mining complex, the Tunnel Ridge mining complex and the MC Mining mining complex.
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