Industry Tailwinds Bullish For ARLP Stock
Demand for coal may be down but it’s certainly not out. It’s essential for generating both electricity and heat. Thermal coal, or steam coal, is responsible for supplying roughly 25% of the world’s primary energy and 40% of global electricity.
And, thanks to the green movement, we’ll be needing a lot more thermal coal. It’s essential for electric vehicles (EVs), data centers, and artificial intelligence (AI) revolution. (Source: “Investor Presentation, July 2026,” Alliance Resource Partners, L.P., last accessed August 4, 2026.)
As a result, demand for coal is expected to climb almost 16% by 2030; three times the growth forecasted just a year ago. That’s a huge increase in demand, especially when you consider America’s demand for electricity has grown less than one percent annually for more than two decades. (Source: “Can the U.S. Power Industry Meet AI’s Steep Energy Demands?,” Energy Now, last accessed August 4, 2026.)
And that’s great news for Alliance Resource Partners, L.P. (NASDAQ:ARLP).
Alliance Resource Partners, L.P., a leading coal producer in the eastern U.S., serving utility, industrial, and steelmaking customers both domestically and internationally. In 2025 it sold 33.0 million tons of coal and produced 33.2 million tons of coal.
Alliance Resource is also a diversified natural resource company that owns a growing portfolio of mineral and royalty interests in strategic oil & gas producing regions across the United States.
It markets its oil & gas mineral interests for lease to major operators in those regions and generates royalty income from the leasing and development of those mineral interests. The partnership also generates coal royalty income from mineral reserves and resources it owns and leases to its coal mining operations.
On July 1, 2026, Alliance completed its $206.2 million acquisition of oil & gas mineral interests in AllDale Minerals III, LP and AllDale Minerals IV, LP, adding 48,500 net royalty acres to the Oil & Gas Royalties segment.
Following the acquisition, ARLP now controls approximately 115,680 net royalty acres within its Oil & Gas Royalties segment, including over 44,770 net royalty acres in the Permian Basin.
Management said the acquisition will be immediately accretive to ARLP’s free cash flow per unit and strengthens ARLP’s long-term royalty platform, broadens our exposure to high-quality operators and advances its long-term strategy of building a durable, cash-generating royalties business.
Record Oil & Gas Royalty Revenues
For the second quarter ended June 30, 2026, Alliance Resource Partners reported total revenue of $551.6 million, up from 547.4 million a year earlier. (Source: “Reports Second Quarter Financial and Operating Results; Declares Quarterly,” Alliance Resource Partners, L.P., July 27, 2026.)
Net income increased 34% to $79.6 million, $0.61 per share. Adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) rallied approximately 16% to $185.7 million.
During the quarter, the partnership reported record oil & gas royalty revenues of $46.3 million, up 30.5% on an annual basis. It reported record segment Adjusted EBITDA of $38.0 million.
It also announced that it secured 21.2 million additional committed and priced sales tons over the 2026 – 2031 time period.
Alliance Resource ended the quarter with total liquidity of $424.0 million, which included $111.2 million of cash and cash equivalents and $312.8 million of borrowings available under its revolving credit facilities. Of note, Alliance Resource also owns 646 bitcoin, which are, of this writing, valued at $58.1 million.
Commenting on the results, Joseph W. Craft III, Chairman, President, and CEO said, “Our coal operations performed well during the quarter, highlighted by strong productivity and disciplined cost control.”
Looking ahead, Craft added that the partnership’s operations are “well-positioned to meaningfully increase production and cash flow generation during the second half of this year.”
Maintains Quarterly Distribution at $0.60/Unit
Income investors love limited partnerships because they have to pay at least 90% of their income to unitholders in the form of a dividend. Thanks to Alliance Resource’s conservative balance sheet and reliable distributable cash flow generation, it is able to provide its shareholders with a reliable distribution.
Since its inception in 1999, the Partnership has paid cumulative cash distributions of ~$4.9 billion.
This past May, Alliance Resource’s board declared a quarterly cash distribution of $0.60 per unit, or $2.40 per share, for a current yield of 9.36%.
ARLP Units Hit Record High
ARLP units have been having a pretty solid year. In late March, ARLP units hit a record high of $28.76. ARLP units have experienced some profit taking since then but continue to trade above $26.00 per unit.
As of this writing (August 4) ARLP units are still faring better than the S&P 500 and Nasdaq, trading up:
- 10% over the last month
- 12% over the last six months
- 18.6% year to date
By all accounts, Wall Street expects ARLP units to hit fresh highs over the coming quarters, with analyst’s providing a 12-month unit target of $33.17 to $35.00. This points to potential upside of approximately 18.6% to 27.5%.
Chart courtesy of StockCharts.com
The Lowdown on Alliance Resource Partners, L.P.
Alliance Resource Partners is the one of the largest producers of thermal coal in the Eastern U.S. with strategically located, low cost, tier 1 assets. It also has high-quality oil and gas minerals portfolio giving it meaningful exposure to top-tier operators in the Permian Basin.
This helps it report strong operational results. Its multi year sales visibility through a strong contract book and blue-chip, domestic utility customers helps provide it with reliable revenue visibility too.
And, thanks to policy tailwinds out of Washington, and growing demand for thermal coal from the green economy, coal is forecast to experience meaningful growth over the next five years
That’s good news for the 205 institutions that hold 16.5% of all outstanding shares. Some of its largest institutional holders include Bank of America, JP Morgan Chase & Company, and Goldman Sachs Group Inc. (Source: “Alliance Resource Partners, L.P. (ARLP),” Yahoo! Finance, last accessed June 10, 2025.)
Insiders hold an even more impressive 29.3% of all outstanding shares. This should provide further incentive for management to see the partnership perform well.