NACCO Industries (NC) versus CONSOL Energy (CNX) Critical Analysis

NACCO Industries (NYSE: NC) and CONSOL Energy (NYSE:CNX) are both consumer discretionary companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Volatility & Risk

NACCO Industries has a beta of 0.34, suggesting that its share price is 66% less volatile than the S&P 500. Comparatively, CONSOL Energy has a beta of 1.54, suggesting that its share price is 54% more volatile than the S&P 500.

Dividends

NACCO Industries pays an annual dividend of $2.08 per share and has a dividend yield of 4.8%. CONSOL Energy does not pay a dividend. NACCO Industries pays out 32.1% of its earnings in the form of a dividend. CONSOL Energy has raised its dividend for 3 consecutive years.

Profitability

This table compares NACCO Industries and CONSOL Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NACCO Industries 6.75% 18.54% 7.13%
CONSOL Energy -7.49% 1.09% 0.48%

Insider and Institutional Ownership

49.3% of NACCO Industries shares are owned by institutional investors. Comparatively, 99.8% of CONSOL Energy shares are owned by institutional investors. 30.6% of NACCO Industries shares are owned by company insiders. Comparatively, 1.5% of CONSOL Energy shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings for NACCO Industries and CONSOL Energy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NACCO Industries 0 0 0 0 N/A
CONSOL Energy 0 5 4 0 2.44

CONSOL Energy has a consensus target price of $21.00, indicating a potential upside of 33.50%. Given CONSOL Energy’s higher probable upside, analysts clearly believe CONSOL Energy is more favorable than NACCO Industries.

Earnings & Valuation

This table compares NACCO Industries and CONSOL Energy’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
NACCO Industries $856.44 million 0.35 $29.60 million $6.48 6.67
CONSOL Energy $2.03 billion 1.79 -$848.10 million ($0.88) -17.87

NACCO Industries has higher revenue, but lower earnings than CONSOL Energy. CONSOL Energy is trading at a lower price-to-earnings ratio than NACCO Industries, indicating that it is currently the more affordable of the two stocks.

Summary

CONSOL Energy beats NACCO Industries on 9 of the 16 factors compared between the two stocks.

About NACCO Industries

NACCO Industries, Inc. is a holding company. The Company’s principal business includes mining. The Company operates through the NACoal segment. The Company’s subsidiary includes The North American Coal Corporation (NACoal). The Company’s NACoal segment mines coal for use in power generation and provides mining services for other natural resources companies. Coal is surface mined from NACoal’s mines in North Dakota, Texas, Mississippi, Louisiana and the Navajo Nation in New Mexico. NACoal’s operating coal mining subsidiaries include Bisti Fuels Company, LLC (Bisti), Caddo Creek Resources Company, LLC (Caddo Creek), Camino Real Fuels, LLC (Camino Real), The Coteau Properties Company (Coteau), Coyote Creek Mining Company, LLC (Coyote Creek), Demery Resources Company, LLC (Demery), The Falkirk Mining Company (Falkirk), Liberty Fuels Company, LLC (Liberty), Mississippi Lignite Mining Company (MLMC) and The Sabine Mining Company (Sabine).

About CONSOL Energy

CONSOL Energy Inc. (CONSOL Energy) is an integrated energy company. The Company’s divisions include Exploration and Production (E&P), Pennsylvania (PA) Mining Operations and Other. The E&P division operates through four segments: Marcellus Shale, Utica Shale, Coalbed Methane (CBM) and Other Gas, which produce pipeline quality natural gas for sale primarily to gas wholesalers. Its E&P division focuses on Appalachian area natural gas and liquids activities, including production, gathering, processing and acquisition of natural gas properties in the Appalachian Basin. The Other Gas segment is primarily related to shallow oil and gas production and the Chattanooga Shale in Tennessee. The principal activities of the PA Mining Operations division are mining, preparation and marketing of thermal coal, sold primarily to power generators. The Other division includes business activities, such as coal terminal operations and water operations.

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