As you know from my previous article, I like value stocks that pay dividends.
I also like coal. So it was only natural for me to find a value play in the coal industry.
On the domestic front there is Arch Coal Inc., (ACI). Arch Coal currently has a PE around 17, a dividend yield of 0.8%, and an ROE around 17. There is also Peabody Energy Corp. (BTU). Similar to Arch Coal, Peabody currently has a PE around 17, a dividend yield of 0.6%, and an ROE around 17. Consol Energy, Inc. (CNX) currently has a PE around 16, a dividend yield of 0.8%, and an ROE of 39%. In addition, there is Massey Energy Co. (MEE) which currently has a PE around 42, a dividend yield of 0.7%, and an ROE around 5%. Manufacturers of turbines, which convert coal into electricity, include General Electric (GE) and Siemens (SI).
For growth investors there is Anglo American PLC (NASDAQ: AAUK). However, right now, I think the best value play is Sasol Ltd. (NYSE: SSL). Sasol is a South African Company that, among other things, uses coal to liquid (CTL) technology to produce various synfuels. Sasol has the 3Ms; the money, the management, and the moat to be considered a great long-term investment. Sasol currently has a PE of around 13, a dividend yield of 3.6%, and an ROE around 29%. For more interesting reading, I suggest you visit there website at www.sasol.com and also read there newsletter which is issued every six months.