Alliance Resource Partners: The 9% Yield Just Got A Lot Safer

Summary Alliance Resource Partners remains a BUY, offering a 9.2% yield and improved distribution coverage at 1.39x after strong Q2 results. ARLP's distributable cash flow rose 39% year-over-year, driven by cost reductions and operational improvements, supporting the sustainability of its high yield. The $206M AllDale acquisition expands ARLP's royalty acreage, is immediately accretive, and positions the partnership for potential distribution growth in 2027. ARLP trades at 5.1x forward EV/EBITDA with net leverage below 0.7x, benefiting from contracted cash flows and a growing, diversified royalty business. Indigo Division/iStock via Getty Images Alliance Resource Partners Coverage Back on June 6, I called Alliance Resource Partners ( ARLP ) a cautious Buy at a 9% yield when it was trading at a low 5.2x EV/EBITDA. Since then, unfortunately, the units This article was written by The Supercycle Investor 15.93K Followers Follow The Supercycle Investor (formerly Gold Mining Bull) is a commodities analyst with more than a decade of investing experience across the natural resource sector. Coverage spans gold and silver miners, copper, oil and gas producers, natural gas, lithium, uranium, MLPs, and royalty and streaming companies... all tied to the structural commodity supercycle driven by the AI buildout, electrification, and years of underinvestment in supply. Every piece is built on data-driven valuation analysis with balanced coverage, weighing both the upside and risks. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in ARLP over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.