Alliance Resource Partners: The 9% Yield Does The Heavy Lifting

Alliance Resource Partners is a Buy for its covered 9.3% yield and diversified cash flow from coal and growing oil and gas royalties. ARLP’s distributable cash flow coverage rebounded to 1.39x, with leverage remaining conservative even after funding the AllDale royalty acquisition. Operational improvements drove coal costs lower, while the AllDale deal is expected to lift distributable cash flow per unit by 8–9% next year. Coal demand remains resilient as grid reliability concerns delay plant retirements, extending ARLP’s cash flow window and supporting the income-focused thesis.

Let me get the point out first. I think Alliance Resource Partners ( ARLP ) is a Buy here, and I want to be honest that I am not buying it as a bet