ARLP pairs a 9.71% covered yield with coal-resilient cash flow and 75%–85% margin royalties, supporting meaningful upside as AllDale accelerates diversification.
Overview
Alliance Resource Partners is the second-largest coal producer in the eastern United States, operating a diversified MLP with Illinois Basin and Appalachia coal, oil and gas royalties, coal royalties, Matrix mining-safety technology, and a Bitcoin-mining operation. Its core advantage is a highly contracted, low-cost thermal coal base with high switching costs because utility boilers are designed for specific coal specifications. **The investment case rests on stable coal cash flows being redeployed into 75%–85% EBITDA-margin royalty assets.** Q2 2026 revenue rose 0.7% year over year to $551.6 million, while net income increased 33.9% to $79.6 million and adjusted EBITDA rose 14.7% to $185.7 million. The $0.61 unit EPS result missed consensus by $0.02–$0.05, largely because Bitcoin fair-value losses reduced EPS by $0.05. At $24.71, ARLP offers a $2.40 annualized distribution, a 9.71% yield, and 1.39x coverage. Catalysts include AllDale III & IV, expected to lift next year's distributable cash flow per unit by 8%–9%, higher second-half production, and delayed coal retirements. The five-year probability-weighted target is $33.17.