NYSE:BTU

Stock Analysis Report

Executive Summary

Peabody Energy Corporation engages in coal mining business.

Rewards

Trading at 72.6% below its fair value

Risk Analysis

Earnings are forecast to decline by an average of -47.5% per year for the next 3 years

Interest payments are not well covered by earnings

Dividend of 6.44% is not well covered by earnings

Highly volatile share price over past 3 months

+ 1 more risk


Snowflake Analysis

Undervalued with mediocre balance sheet.


Similar Companies

Share Price & News

How has Peabody Energy's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

0.8%

BTU

-0.3%

US Oil and Gas

1.7%

US Market


1 Year Return

-74.9%

BTU

-6.8%

US Oil and Gas

23.2%

US Market

Return vs Industry: BTU underperformed the US Oil and Gas industry which returned -4.2% over the past year.

Return vs Market: BTU underperformed the US Market which returned 24.7% over the past year.


Shareholder returns

BTUIndustryMarket
7 Day0.8%-0.3%1.7%
30 Day-9.9%0.9%4.2%
90 Day-43.6%6.8%11.9%
1 Year-72.6%-74.9%-3.4%-6.8%25.8%23.2%
3 Yearn/a-7.4%-16.0%52.8%42.9%
5 Yearn/a-10.6%-23.6%75.2%55.8%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is Peabody Energy 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: BTU ($9) is trading below our estimate of fair value ($32.8)

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


Price To Earnings Ratio

PE vs Industry: BTU is good value based on its PE Ratio (3.1x) compared to the Oil and Gas industry average (10.2x).

PE vs Market: BTU is good value based on its PE Ratio (3.1x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: BTU is good value based on its PB Ratio (0.3x) compared to the US Oil and Gas industry average (1x).


Next Steps

Future Growth

How is Peabody Energy forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

-47.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: BTU's earnings are forecast to decline over the next 3 years (-47.5% per year).

Earnings vs Market: BTU's earnings are forecast to decline over the next 3 years (-47.5% per year).

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

Revenue vs Market: BTU's revenue is expected to decline over the next 3 years (-3.7% per year).

High Growth Revenue: BTU's revenue is forecast to decline over the next 3 years (-3.7% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: BTU is forecast to be unprofitable in 3 years.


Next Steps

Past Performance

How has Peabody Energy performed over the past 5 years?

57.5%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: BTU has high quality earnings.

Growing Profit Margin: BTU's current net profit margins (6.4%) are lower than last year (9.6%).


Past Earnings Growth Analysis

Earnings Trend: BTU has become profitable over the past 5 years, growing earnings by 57.5% per year.

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

Earnings vs Industry: BTU had negative earnings growth (-43.4%) over the past year, making it difficult to compare to the Oil and Gas industry average (-13.3%).


Return on Equity

High ROE: BTU's Return on Equity (11.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Peabody Energy's financial position?


Financial Position Analysis

Short Term Liabilities: BTU's short term assets ($1.6B) exceed its short term liabilities ($900.9M).

Long Term Liabilities: BTU's short term assets ($1.6B) do not cover its long term liabilities ($2.9B).


Debt to Equity History and Analysis

Debt Level: BTU's debt to equity ratio (44.7%) is considered high.

Reducing Debt: BTU's debt to equity ratio has reduced from 167.1% to 44.7% over the past 5 years.

Debt Coverage: BTU's debt is well covered by operating cash flow (58.6%).

Interest Coverage: BTU's interest payments on its debt are not well covered by EBIT (2.7x coverage).


Balance Sheet

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

Debt Coverage by Assets: BTU's debt is covered by short term assets (assets are 1.2x debt).


Next Steps

Dividend

What is Peabody Energy's current dividend yield, its reliability and sustainability?

6.67%

Current Dividend Yield


Dividend Yield vs Market

company6.7%marketbottom25%1.4%markettop25%3.6%industryaverage4.0%forecastin3Years6.8%

Current dividend yield vs market & industry

Notable Dividend: BTU's dividend (6.44%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: BTU's dividend (6.44%) is in the top 25% of dividend payers in the US market (3.66%)


Stability and Growth of Payments

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

Growing Dividend: BTU's dividend payments have increased, but the company has only paid a dividend for 2 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (18.8%), BTU's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: BTU is forecast to pay a dividend in 3 years whilst incurring a loss, therefore the dividend is not forecast to be well covered.


Next Steps

Management

What is the CEO of Peabody Energy's salary, the management and board of directors tenure and is there insider trading?

4.4yrs

Average management tenure


CEO

Glenn Kellow (51yo)

4.7yrs

Tenure

US$7,333,255

Compensation

Mr. Glenn L. Kellow is President and Chief Executive Officer of Peabody Energy Corporation (“Peabody”) since May 2015. Mr. Kellow has been a Director of Peabody Energy Corporation since January 2015. Mr. K ...


CEO Compensation Analysis

Compensation vs Market: Glenn's total compensation ($USD7.33M) is above average for companies of similar size in the US market ($USD2.53M).

Compensation vs Earnings: Glenn's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Management Age and Tenure

4.4yrs

Average Tenure

56yo

Average Age

Experienced Management: BTU's management team is considered experienced (4.4 years average tenure).


Board Age and Tenure

2.8yrs

Average Tenure

63yo

Average Age

Experienced Board: BTU's board of directors are not considered experienced ( 2.8 years average tenure), which suggests a new board.


Insider Trading

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


Recent Insider Transactions

BuyUS$871,50029 Aug 19
Elliott Management Corporation
EntityCompany
Shares50,000
Max PriceUS$17.43
BuyUS$176,32014 Aug 19
Elliott Management Corporation
EntityCompany
Shares9,801
Max PriceUS$17.99
BuyUS$264,56409 Aug 19
Elliott Management Corporation
EntityCompany
Shares15,199
Max PriceUS$17.91
BuyUS$718,98806 Aug 19
Elliott Management Corporation
EntityCompany
Shares40,302
Max PriceUS$17.84
BuyUS$11,642,21705 Aug 19
Elliott Management Corporation
EntityCompany
Shares634,698
Max PriceUS$18.48

Ownership Breakdown

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


Management Team

  • Lina Young

    Chief Information Officer & Senior VP

    • Charles Meintjes (56yo)

      Executive VP & COO

      • Tenure: 0.5yrs
      • Compensation: US$2.62m
    • Bob Bruer

      Vice President of Tax Planning & Compliance

      • Patrick Forkin (61yo)

        Senior Vice President of Corporate Development

        • Tenure: 2.2yrs
      • Bryan Galli (58yo)

        Group Executive of Marketing and Trading

        • Tenure: 5.8yrs
      • Kemal Williamson (59yo)

        President of U.S. Operations

        • Tenure: 7.3yrs
        • Compensation: US$2.26m
      • Vic Svec

        SVP, Global Investor and Corporate Relations

        • A. Dorch (51yo)

          Executive VP of Government Affairs

          • Tenure: 4.4yrs
          • Compensation: US$2.01m
        • Glenn Kellow (51yo)

          President

          • Tenure: 4.7yrs
          • Compensation: US$7.33m
        • Mark Spurbeck (45yo)

          Interim Chief Financial Officer

          • Tenure: 1.8yrs

        Board Members

        • Teresa Madden (63yo)

          Independent Director

          • Tenure: 2.8yrs
          • Compensation: US$267.47k
        • Steve Gorman (63yo)

          Independent Director

          • Tenure: 2.8yrs
          • Compensation: US$254.97k
        • Mike Sutherlin (73yo)

          Independent Director

          • Tenure: 6yrs
          • Compensation: US$254.97k
        • Joe Laymon (66yo)

          Independent Director

          • Tenure: 2.8yrs
          • Compensation: US$254.97k
        • Bob Malone (67yo)

          Non-Executive Chairman

          • Tenure: 4yrs
          • Compensation: US$394.97k
        • Ken Moore (50yo)

          Independent Director

          • Tenure: 2.8yrs
          • Compensation: US$242.47k
        • Andréa Bertone (58yo)

          Independent Director

          • Tenure: 0.9yrs
        • Glenn Kellow (51yo)

          President

          • Tenure: 4.7yrs
          • Compensation: US$7.33m
        • Nick Chirekos (60yo)

          Director

          • Tenure: 2.8yrs
          • Compensation: US$247.47k

        Company Information

        Peabody Energy Corporation's company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Peabody Energy Corporation
        • Ticker: BTU
        • Exchange: NYSE
        • Founded: 1883
        • Industry: Coal and Consumable Fuels
        • Sector: Energy
        • Market Cap: US$841.192m
        • Shares outstanding: 96.80m
        • Website: https://www.peabodyenergy.com

        Number of Employees


        Location

        • Peabody Energy Corporation
        • Peabody Plaza
        • 701 Market Street
        • St. Louis
        • Missouri
        • 63101
        • United States

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        BTUSNSE (Santiago Stock Exchange)YesNew Common StockCLUSDApr 2017
        BTUNYSE (New York Stock Exchange)YesNew Common StockUSUSDApr 2017
        PBEDB (Deutsche Boerse AG)YesNew Common StockDEEURApr 2017

        Biography

        Peabody Energy Corporation engages in coal mining business. The company operates through Powder River Basin Mining, Midwestern U.S. Mining, Western U.S. Mining, Seaborne Metallurgical Mining, Seaborne Thermal Mining, and Corporate and Other segments. It is involved in mining, preparation, and sale of thermal coal primarily to electric utilities; mining bituminous and sub-bituminous coal deposits; and mining metallurgical coal, such as hard coking coal, semi-hard coking coal, semi-soft coking coal, and pulverized coal injection coal. The company supplies coal primarily to electricity generators, industrial facilities, and steel manufacturers. As of December 31, 2018, it owned interests in 23 coal mining operations located in the United States and Australia; and had approximately 4.9 billion tons of proven and probable coal reserves and approximately 500,000 acres of surface property through ownership and lease agreements. The company also engages in direct and brokered trading of coal and freight-related contracts, as well as provides transportation-related services, which involve financial derivative contracts and physical contracts. Peabody Energy Corporation was founded in 1883 and is headquartered in St. Louis, Missouri. On April 13, 2016, Peabody Energy Corporation and its subsidiaries filed a voluntary petition for reorganization under Chapter 11 in the United States Bankruptcy Court for the Eastern District of Missouri. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/17 02:25
        End of Day Share Price2020/01/16 00:00
        Earnings2019/09/30
        Annual Earnings2018/12/31


        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.