Critical Review: Yanzhou Coal Mining Co (YZC) & Foresight Energy (FELP)

Yanzhou Coal Mining Co (NYSE: YZC) and Foresight Energy (NYSE:FELP) are both oils/energy companies, but which is the better stock? We will compare the two businesses based on the strength of their profitabiliy, risk, earnings, dividends, analyst recommendations, institutional ownership and valuation.

Profitability

This table compares Yanzhou Coal Mining Co and Foresight Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Yanzhou Coal Mining Co N/A N/A N/A
Foresight Energy -20.46% -34.99% -3.18%

Earnings & Valuation

This table compares Yanzhou Coal Mining Co and Foresight Energy’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Yanzhou Coal Mining Co N/A N/A N/A ($0.10) -81.69
Foresight Energy $940.14 million 0.75 $180.74 million ($1.90) -2.63

Foresight Energy has higher revenue and earnings than Yanzhou Coal Mining Co. Yanzhou Coal Mining Co is trading at a lower price-to-earnings ratio than Foresight Energy, indicating that it is currently the more affordable of the two stocks.

Dividends

Yanzhou Coal Mining Co pays an annual dividend of $0.01 per share and has a dividend yield of 0.1%. Foresight Energy does not pay a dividend. Yanzhou Coal Mining Co pays out -10.0% of its earnings in the form of a dividend.

Risk & Volatility

Yanzhou Coal Mining Co has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, Foresight Energy has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500.

Insider and Institutional Ownership

0.3% of Yanzhou Coal Mining Co shares are owned by institutional investors. Comparatively, 11.5% of Foresight Energy shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Yanzhou Coal Mining Co and Foresight Energy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Yanzhou Coal Mining Co 0 0 1 0 3.00
Foresight Energy 0 1 0 0 2.00

Foresight Energy has a consensus price target of $5.25, suggesting a potential upside of 5.00%. Given Foresight Energy’s higher possible upside, analysts plainly believe Foresight Energy is more favorable than Yanzhou Coal Mining Co.

Summary

Yanzhou Coal Mining Co beats Foresight Energy on 9 of the 12 factors compared between the two stocks.

About Yanzhou Coal Mining Co

Yanzhou Coal Mining Company Limited is a coal producer in China and Australia, which is primarily engaged in the mining, washing, processing and distribution of coal through railway transportation. The Company’s segments include Coal mining, which is engaged in underground and open-cut mining, preparation and sales of coal and potash mineral exploration; Coal railway transportation, which is engaged in the provision of railway transportation services; Methanol, electricity and heat supply, which is engaged in the production and sales of methanol and electricity and related heat supply services, and Equipment manufacturing, which is engaged in the manufacturing of coal mining and equipment. The Company offers a range of coal products and other mixed coal products, including thermal coal, semi-hard coking coal, semi-soft coking coal, pulverized coal injection (PCI) coal and other mixed coal products.

About Foresight Energy

Foresight Energy LP is engaged in the mining and marketing of coal from reserves and operations located in the Illinois Basin. As of December 31, 2016, the Company controlled 2.1 billion tons of coal in the state of Illinois. Its reserves consist principally of three contiguous blocks of uniform, thick, high heat content (high Btu) thermal coal, which are used for longwall operations. The Company operates four underground mining complexes in the Illinois Basin, including Williamson, Sugar Camp, Hillsboro and Macoupin. Its mining complexes operate in the Illinois Basin with approximately two located in Southern Illinois and over two located in Central Illinois. Williamson, Sugar Camp and Hillsboro are longwall operations, and Macoupin is a continuous miner operation. The Company markets and sells its coal to electric utility and industrial companies in the eastern half of the United States as well as internationally (primarily into Europe).

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