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Should Income Investors Buy Into Alliance Resource Partner's 7.8% Yield?

Published Wed, 11 Jan 2017 01:55:34 -0500 on Seeking Alpha

This post was written by Bob Ciura on January 10, 2017, for Sure Dividend
One of the industries most eager to bid farewell to 2016 was coal. Demand for coal fell off a cliff, from a variety of sources including intensifying regulation, as well as a broader shift away from coal toward natural gas.
Even well-run, highly profitable coal companies like Alliance Resource Partners (Nasdaq: ARLP) suffered. Despite a unique competitive advantage and a long track record of success, it slashed its distribution by 35% last year.
Prior to the distribution cut, Alliance Resource had an enviable dividend track record. Coming into 2016, the company had raised its distribution for 29 consecutive quarters. At the time, it was a Dividend Achiever. (Note: The stock is still technically on the Dividend Achievers List, but will soon be removed.)
You can see the entire list of You can see the entire list of all 272 Dividend Achievers here.
Now that Alliance Resource has reset its distribution at a lower, but more sustainable rate, the question is whether investors should give coal another chance.
This article will discuss the current environment for coal, and Alliance Resource's future prospects.
Business Overview
Alliance Resource isn't your average MLP. It is a coal mining company, and was the first coal MLP.
The company operates nine mining complexes in Illinois, Indiana, Kentucky, Maryland, and West Virginia. Its production facilities are located in two... Read more