ARLP pairs a roughly 9.5% covered distribution and low-cost coal franchise with expanding oil-and-gas royalties, offering attractive cash returns if data-center demand delays—but cannot erase—the energy transition.
Overview
Alliance Resource Partners is a diversified natural-resource partnership and the Eastern United States’ second-largest underground coal producer. It sells high-heat thermal and metallurgical coal to utilities and industrial customers, collects coal and oil-and-gas mineral royalties, and has complementary mine-technology and energy investments. **The investment case rests on contracted, low-cost coal cash flows funding an expanding royalty platform**, which is less capital intensive and less exposed to operating costs. For the twelve months ended June 30, 2026, ARLP generated $2.174 billion of revenue and $718 million of Adjusted EBITDA. Q2 2026 revenue rose 0.7% to $551.6 million, Adjusted EBITDA increased 14.7% to $185.7 million, and DCF climbed 39.1% to $108.2 million; coverage of the $0.60 quarterly distribution was 1.39x. The $206.2 million AllDale acquisition added about 48,500 royalty acres. **At roughly $24.80, units yield about 9.5% and trade at 5.5x EV/EBITDA and 10.2x forward earnings**, reflecting fossil-fuel and retirement risk. Data-center-related power demand and the expanding royalty mix are near-term supports; the report’s five-year probability-weighted unit target is $31.01, while consensus is $31.17.