Best coal stocks to buy in 2022
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Our experts have been through the markets to select their five favourite coal stocks. These choices are based on historical performance as well as their future prospects, and you can read more about each decision below.
What are the top coal stocks to buy?
The table ranks our best five coal companies to invest in this year. Follow the links to find the latest stock price and learn about any recent changes, or scroll down for a more detailed look at the individual stocks in turn.
|#||Stock ticker||Company name||Where to Invest|
|2||HCC||Warrior Met Coal|
1. Arch Resources (NYSE: ARCH)
Arch Resources is a coal mining company that operates 30 mines across North America. The company was formed in the late 1960s and is now the second largest coal producer in the United States.
Arch’s has had a chequered recent history, having been forced to file for bankruptcy in 2016 before being hit by the coronavirus pandemic in 2020. However, it has begun to recover in the aftermath of that pandemic, and its share price is now around the level it was before the crisis hit.
It’s difficult to predict the future of the coal industry but Arch earns top place on this list because of its size and the fact the company has been proactive in preparing for it. It has made the tough decision to switch to mining coal to make steel, an industry for which there are few green alternatives to coal, rather than electricity.
2. Warrior Met Coal (NYSE: HCC)
Like its predecessor on this list, Warrior Met Coal is a mining company that produces coal for the steel industry. It was formed in 2015 to take over the assets of Walter Energy, which had gone bankrupt. The company ships its coal all over the world and operates in the Americas, Europe, and Asia.
Again like Arch Resources, Warrior Met has had a tough time over the last few years. Its share price has been flat ever since the new company began trading on the stock market in 2017, and recently it’s been embroiled in a war with its own workers, who went on strike over job losses and benefit cuts.
If the company is able to solve its labour problem then it can quickly ramp up production. It also might be able to return to its previous policy of stock buybacks. Both those events would be good news for the value of your investment and make Warrior Met a potential buy low opportunity.
3. Consol Energy (NYSE: CEIX)
Consol is an energy company that’s the largest underground coal miner in the United States. The company’s history dates all the way back to 1864, but it has only existed in its current form since 2017.
As with many coal stocks, it has had a difficult time of late. The stock price experienced a deep decline between 2019 and the end of 2020 as it fell by almost 80%. Since then, it has recovered, as it’s been able to mine more coal. It posted 2021 revenues that were ten times higher than the previous year.
A big part of that rise has been down to foreign markets. Consol has been able to produce more coal than ever and ship it abroad, while a fall in coal prices has made it a more attractive source of energy to power plants in the US itself. If that trend continues then Consol would become an attractive stock in the years to come.
4. NACCO Industries (NYSE: NC)
NACCO is a holding company that owns a network of businesses in the energy sector. One of those is its coal mining division, an industry in which the company has had its roots going back to its foundation in 1913.
In recent times, the company has streamlined its business to focus on mining. That led to its best stock market performance as it hit highs of $60 per share in 2019. The stock has drifted away from those highs since then, largely as a result of the coronavirus pandemic which caused many logistical problems.
Overall, NACCO is a major coal mining operation that expects its revenues to increase over the next year. It rewards shareholders with a dividend and the yield should go back up again as the effects of the pandemic wear off. It might not be the flashiest stock around, but it’s certainly a reliable way to gain exposure to the coal industry.
5. American Resources (NASDAQ: AREC)
American Resources is a US-based company that works across the entire coal lifecycle, from mining to selling and transportation. The company deals specifically with producing coal for the steel industry and has customers around the world.
Since the company began trading on the NASDAQ exchange in 2015, it has had quite a rocky ride. It currently trades 80% below its original stock price and has rarely been anywhere near the $18 all time high it achieved soon after going public.
However, there are signs that the tide has turned. The company has spent a few years snapping up struggling competitors and has built out a major coal operation. Alongside that investment it has poured money into new technologies to identify other minerals and environmentally-friendly energy sources. Although it might not be the safest coal stock, it certainly has a disruptive attitude and a lot of potential.
Where to buy the best coal shares
You can buy any of these shares through the brokers below. These are the top trading platforms around and it’s easy to sign up by simply clicking on the links in the table.
What is a coal stock?
Any company that’s involved in the coal production process. That means companies that mine it from the ground, transport it to where it’s needed, or burn it to produce energy.
Are coal shares a good investment?
Not as good as they have been in previous years. The entire coal industry is under pressure due to their environmental record and the rise of cleaner, alternative forms of energy. Coal and industrial stocks dominated the stock market a few decades ago but they are now struggling to keep up.
That doesn’t mean these companies are bad investments, just that you should be aware of the risks of owning them. There is likely to be a place for coal mining for a while yet but they can be hit by bad public relations or simply a loss of customers as power plants turn elsewhere for power.
As with any other industry, you should track the latest news in order to stay ahead of any developments that could affect the companies you own. Do so by following the links below or by visiting our coal news page.
Latest coal news
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