Sure Dividend

High-Quality Dividend Stocks, Long-Term Plan
The Sure Dividend Investing MethodMember's Area

The 4 Best Coal Stocks By Expected Returns Now (Up To 17.2% Annually)

Updated on December 13th, 2023

Coal is the most burdensome form of energy for the environment. This has led numerous countries to coordinate efforts to phase out coal in favor of natural gas and renewable energy sources, such as solar and wind power.

As a result, coal production has steadily declined in the U.S. since the 2008 peak. Fortunately for domestic producers, exports have remained strong due to rising demand in emerging markets.

The price of coal is around $180 per ounce. This has allowed several coal stocks to enjoy solid profitability this year, leading some coal stocks to return cash to shareholders through dividends.

You can download your free copy of the Dividend Champions list, along with relevant financial metrics like price-to-earnings ratios, dividend yields, and payout ratios, by clicking on the link below:


Coal stocks are a subset of the broader materials sector.

While many investors have concluded that coal stocks will soon become irrelevant, this may not be true. In this article, we will analyze the four best coal stocks today.

Table Of Contents

You can use the following table of contents to instantly jump to a specific stock:

The top four coal stocks are ranked based on total expected returns over the next five years, from lowest to highest. These four coal stocks collectively represent our top picks in the coal industry over the next five years.

NACCO Industries (NC)

NACCO Industries is a holding company for The North American Coal Corporation, which was incorporated in 1913. The company supplies coal from surface mines to power generation companies.

At 35 million tons of annual production, NACCO Industries is the largest lignite coal producer in the U.S. and ranks among the top ten of all coal producers. NACCO Industries operates in North Dakota, Texas, Mississippi, Louisiana, and the Navajo Nation in New Mexico.

On November 1st, 2023, NACCO Industries reported third quarter results for the period ending September 30th, 2023. For the quarter, revenue of $46.5 million was down 24.7% from the prior year. Earnings-per-share was a loss of $0.51 compared to $1.45 in the third quarter of 2022 just as the company had guided towards on the last conference call.

Click here to download our most recent Sure Analysis report on NACCO Industries (preview of page 1 of 3 shown below):

BHP Group (BHP)

BHP traces its roots back to 1851 and a tin mine on a small island in Indonesia called Billiton. Today, it is an exploration and production giant in the metals and mining industry and is headquartered in Melbourne, Australia. BHP explores, produces, and processes iron ore, metallurgical coal, and copper.

In mid-October, BHP provided (10/18/23) an operational review for the first quarter of fiscal 2023 (BHP’s fiscal year ends June 30th). After a heavy maintenance schedule in the previous quarter, the company grew its production of copper 11% over the prior year’s quarter, though it kept its guidance for the full year intact.

The production of iron ore dipped -3% due to maintenance activity but guidance for the full year remained intact. The price of iron ore, which is a great determinant of the results of the company, slipped -2% sequentially.

Click here to download our most recent Sure Analysis report on BHP Group (preview of page 1 of 3 shown below):

Rio Tinto Group (RIO)

Rio Tinto Plc was founded in 1962 and is headquartered in London, United Kingdom. It is one of the world’s largest precious metals mining companies, with a market capitalization of $114 billion.

The company operates in the exploration, mining, and production of various minerals. Rio Tinto’s main segments include Iron Ore, Aluminum, Copper & Diamonds, and Energy & Minerals.

In mid-October, Rio Tinto reported (10/17/23) production results for the third quarter of fiscal 2023. Production of iron ore slipped -1% over last year’s quarter but the company still expects annual production in the upper half of its initial guidance of 320-335 million tons.

Click here to download our most recent Sure Analysis report on Rio Tinto (preview of page 1 of 3 shown below):

Alliance Resource Partners (ARLP)

Alliance Resource Partners is the first publicly traded Master Limited Partnership and the second–largest coal producer in the eastern United States.

Apart from its primary operations of producing and marketing coal to major domestic and international utility users, the company also owns mineral and royalty interests in premier oil & gas regions, like the Permian, Anadarko, and Williston Basins.

Finally, the company provides terminal services, including transporting and loading coal and technology products and services.

On October 27th, 2023, Alliance Resource Partners reported its Q3 results for the period ending September 30th, 2023. Revenues for the quarter grew by 1.3% year-over-year to $636.5 million. Higher revenues were primarily the result of higher transportation and other revenues, partially offset by lower oil & gas royalties.

Click here to download our most recent Sure Analysis report on Alliance Resource Partners (preview of page 1 of 3 shown below):

Final Thoughts

Coal stocks are highly cyclical and operate in an industry that has been suffering from a secular decline. Therefore, investors should consider the elevated risks of investing in such a troubled industry.

With that said, multiple coal stocks still pay dividends to shareholders and have reasonable valuations. As a result, the best coal stocks could still generate strong returns in the years ahead.

Overall, while risk-averse investors should avoid coal stocks in general, those comfortable with the risks might consider purchasing the above coal stocks.

The Dividend Champions list is not the only way to quickly screen for stocks that regularly pay rising dividends.

Thanks for reading this article. Please send any feedback, corrections, or questions to

More from sure dividend
The Sure Dividend Investing MethodMember's Area