NYSE:ARCH

Stock Analysis Report

Executive Summary

Arch Coal, Inc. produces and sells thermal and metallurgical coal from surface and underground mines.


Snowflake Analysis

Good value with adequate balance sheet and pays a dividend.


Similar Companies

Share Price & News

How has Arch Coal's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ARCH's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-12.7%

ARCH

5.9%

US Oil and Gas

7.2%

US Market


1 Year Return

-70.0%

ARCH

-56.4%

US Oil and Gas

-10.4%

US Market

Return vs Industry: ARCH underperformed the US Oil and Gas industry which returned -56.7% over the past year.

Return vs Market: ARCH underperformed the US Market which returned -11.9% over the past year.


Shareholder returns

ARCHIndustryMarket
7 Day-12.7%5.9%7.2%
30 Day-45.6%-35.6%-12.6%
90 Day-61.8%-51.6%-19.4%
1 Year-69.2%-70.0%-54.6%-56.4%-8.5%-10.4%
3 Year-59.9%-62.4%-51.8%-56.5%15.8%8.3%
5 Yearn/a-55.3%-62.2%35.8%21.0%

Price Volatility Vs. Market

How volatile is Arch Coal's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Arch Coal undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ARCH ($27.32) is trading below our estimate of fair value ($260.1)

Significantly Below Fair Value: ARCH is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ARCH is good value based on its PE Ratio (1.9x) compared to the Oil and Gas industry average (6.7x).

PE vs Market: ARCH is good value based on its PE Ratio (1.9x) compared to the US market (13x).


Price to Earnings Growth Ratio

PEG Ratio: ARCH's earnings are forecast to decline next year, so we can't calculate its PEG ratio.


Price to Book Ratio

PB vs Industry: ARCH is overvalued based on its PB Ratio (0.6x) compared to the US Oil and Gas industry average (0.5x).


Next Steps

Future Growth

How is Arch Coal forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

-0.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ARCH's earnings are forecast to decline over the next 3 years (-0.4% per year).

Earnings vs Market: ARCH's earnings are forecast to decline over the next 3 years (-0.4% per year).

High Growth Earnings: ARCH's earnings are forecast to decline over the next 3 years.

Revenue vs Market: ARCH's revenue is expected to decline over the next 3 years (-3% per year).

High Growth Revenue: ARCH's revenue is forecast to decline over the next 3 years (-3% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ARCH's Return on Equity is forecast to be high in 3 years time (27.9%)


Next Steps

Past Performance

How has Arch Coal performed over the past 5 years?

57.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ARCH has high quality earnings.

Growing Profit Margin: ARCH's current net profit margins (10.3%) are lower than last year (12.7%).


Past Earnings Growth Analysis

Earnings Trend: ARCH has become profitable over the past 5 years, growing earnings by 57.9% per year.

Accelerating Growth: ARCH's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ARCH had negative earnings growth (-25.2%) over the past year, making it difficult to compare to the Oil and Gas industry average (-11.4%).


Return on Equity

High ROE: ARCH's Return on Equity (36.5%) is considered high.


Next Steps

Financial Health

How is Arch Coal's financial position?


Financial Position Analysis

Short Term Liabilities: ARCH's short term assets ($706.7M) exceed its short term liabilities ($311.0M).

Long Term Liabilities: ARCH's short term assets ($706.7M) do not cover its long term liabilities ($916.2M).


Debt to Equity History and Analysis

Debt Level: ARCH's debt to equity ratio (49%) is considered high.

Reducing Debt: ARCH's debt to equity ratio has reduced from 309.6% to 49% over the past 5 years.


Balance Sheet

Inventory Level: ARCH has a high level of physical assets or inventory.

Debt Coverage by Assets: ARCH's debt is covered by short term assets (assets are 2.3x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: ARCH is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: ARCH is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Arch Coal's current dividend yield, its reliability and sustainability?

7.30%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: ARCH's dividend (7.32%) is higher than the bottom 25% of dividend payers in the US market (1.98%).

High Dividend: ARCH's dividend (7.32%) is in the top 25% of dividend payers in the US market (5.49%)


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, ARCH has been paying a dividend for less than 10 years.

Growing Dividend: ARCH's dividend payments have increased, but the company has only paid a dividend for 3 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (12.5%), ARCH's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ARCH's dividends in 3 years are forecast to be thoroughly covered by earnings (13.5% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

8.0yrs

Average management tenure


CEO

John Eaves (61yo)

7.83s

Tenure

US$2,934,455

Compensation

Mr. John W. Eaves, also known as Jo, has been Chief Executive Officer of Arch Coal, Inc. since April 26, 2012. Mr. Eaves served as President of Arch Coal, Inc since April 28, 2006 until April 23, 2015. He  ...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD2.93M) is above average for companies of similar size in the US market ($USD2.17M).

Compensation vs Earnings: John's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
John Eaves
Executive Chairman7.83yrsUS$2.93m0.43% $1.8m
Paul Lang
CEO, President & Directorno dataUS$1.85m0.23% $957.9k
John Drexler
Chief Operating Officer11.83yrsUS$1.39m0.14% $584.3k
John Ziegler
Senior VP & Chief Administrative Officer1.17yrsUS$785.44k0.084% $349.2k
Robert Jones
Senior VP of Law20yrsUS$905.94k0.084% $347.8k
John Lorson
VP & Chief Accounting Officerno datano data0.0072% $30.0k
Deck Slone
Senior Vice President of Strategy & Public Policy11.58yrsno data0.059% $245.3k
Matthew Ferguson
Senior Vice President of Metallurgical & International Thermal Coal - Arch Coal Sales8yrsno datano data
Paul Demzik
Senior VP & Chief Commercial Officer1.17yrsno datano data
Gregory Szczepan
Controller & Director of External Financial Reporting11.83yrsno datano data

8.0yrs

Average Tenure

57yo

Average Age

Experienced Management: ARCH's management team is seasoned and experienced (8.1 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
John Eaves
Executive Chairman7.83yrsUS$2.93m0.43% $1.8m
Paul Lang
CEO, President & Directorno dataUS$1.85m0.23% $957.9k
Richard Navarre
Independent Director3.42yrsUS$120.00k0.025% $104.7k
Holly Koeppel
Independent Director1yrUS$168.44k0.013% $53.4k
James Chapman
Lead Independent Director3.42yrsUS$172.92k0.042% $174.5k
Patrick Bartels
Independent Director3.42yrsUS$116.25k0.0096% $39.7k
Patrick Kriegshauser
Independent Director3.42yrsUS$125.00k0.030% $124.3k
Sherman Edmiston
Independent Director3.42yrsUS$115.00k0.025% $104.7k
Robert Hamill
Independent Director1yrUS$168.44k0.019% $80.8k

3.4yrs

Average Tenure

57yo

Average Age

Experienced Board: ARCH's board of directors are considered experienced (3.4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Arch Coal, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Arch Coal, Inc.
  • Ticker: ARCH
  • Exchange: NYSE
  • Founded: 1969
  • Industry: Coal and Consumable Fuels
  • Sector: Energy
  • Market Cap: US$414.607m
  • Shares outstanding: 15.14m
  • Website: https://www.archcoal.com

Number of Employees


Location

  • Arch Coal, Inc.
  • One CityPlace Drive
  • Suite 300
  • St. Louis
  • Missouri
  • 63141
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ACCADB (Deutsche Boerse AG)YesClass A Common StockDEEUROct 2016
ARCHNYSE (New York Stock Exchange)YesClass A Common StockUSUSDOct 2016

Biography

Arch Coal, Inc. produces and sells thermal and metallurgical coal from surface and underground mines. As of December 31, 2019, the company operated eight active mines. It also owned or controlled primarily through long-term leases approximately 28,292 acres of coal land in Ohio; 1,060 acres of coal land in Maryland; 10,095 acres of coal land in Virginia; 323,736 acres of coal land in West Virginia; 81,470 acres of coal land in Wyoming; 268,337 acres of coal land in Illinois; 33,272 acres of coal land in Kentucky; 9,840 acres of coal land in Montana; 358 acres of coal land in Pennsylvania; and 19,146 acres of coal land in Colorado, as well as smaller parcels of property in Alabama, Indiana, Washington, Arkansas, California, Utah, and Texas. The company sells its products to utility, industrial, and steel producers in the United States, Europe, Asia, Central and South America, and Africa. Arch Coal, Inc. was founded in 1969 and is headquartered in St. Louis, Missouri. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/31 04:15
End of Day Share Price2020/03/30 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.