NYSE:NC

Stock Analysis Report

Executive Summary

NACCO Industries, Inc., together with its subsidiaries, operates surface mines that supply bituminous coal and lignite primarily to power generation companies.

Rewards

Trading at 31.9% below its fair value

Earnings grew by 32.4% over the past year

Risk Analysis

Unstable dividend track record

Highly volatile share price over past 3 months



Snowflake Analysis

Excellent balance sheet and good value.


Similar Companies

Share Price & News

How has NACCO Industries's share price performed over time and what events caused price changes?


Latest Share Price and Events

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


Market Performance


7 Day Return

1.4%

NC

-1.0%

US Oil and Gas

2.0%

US Market


1 Year Return

30.4%

NC

-7.6%

US Oil and Gas

23.6%

US Market

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

Return vs Market: NC exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

NCIndustryMarket
7 Day1.4%-1.0%2.0%
30 Day1.8%0.02%3.9%
90 Day-23.0%5.9%12.0%
1 Year32.5%30.4%-4.1%-7.6%26.2%23.6%
3 Year1.7%-40.3%-8.3%-16.7%53.2%43.3%
5 Year47.5%-16.6%-11.2%-24.2%75.7%56.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

Is NACCO Industries undervalued compared to its fair value and its price relative to the market?

31.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: NC ($47.97) is trading below our estimate of fair value ($70.49)

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


Price To Earnings Ratio

PE vs Industry: NC is good value based on its PE Ratio (7.5x) compared to the Oil and Gas industry average (10.2x).

PE vs Market: NC is good value based on its PE Ratio (7.5x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: Insufficient data to calculate NC's PEG Ratio to determine if it is good value.


Price to Book Ratio

PB vs Industry: NC is overvalued based on its PB Ratio (1.2x) compared to the US Oil and Gas industry average (1x).


Next Steps

Future Growth

How is NACCO Industries forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

15.5%

Forecasted Energy industry annual growth in earnings


In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as NACCO Industries has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Next Steps

Past Performance

How has NACCO Industries performed over the past 5 years?

47.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NC has high quality earnings.

Growing Profit Margin: NC's current net profit margins (28.9%) are higher than last year (27.2%).


Past Earnings Growth Analysis

Earnings Trend: NC's earnings have grown significantly by 47.4% per year over the past 5 years.

Accelerating Growth: NC's earnings growth over the past year (32.4%) is below its 5-year average (47.4% per year).

Earnings vs Industry: NC earnings growth over the past year (32.4%) exceeded the Oil and Gas industry -13.3%.


Return on Equity

High ROE: NC's Return on Equity (15.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is NACCO Industries's financial position?


Financial Position Analysis

Short Term Liabilities: NC's short term assets ($180.3M) exceed its short term liabilities ($52.8M).

Long Term Liabilities: NC's short term assets ($180.3M) exceed its long term liabilities ($76.7M).


Debt to Equity History and Analysis

Debt Level: NC's debt to equity ratio (2.6%) is considered satisfactory.

Reducing Debt: NC's debt to equity ratio has reduced from 80.8% to 2.6% over the past 5 years.

Debt Coverage: NC's debt is well covered by operating cash flow (849.1%).

Interest Coverage: Insufficient data to determine if NC's interest payments on its debt are well covered by EBIT.


Balance Sheet

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

Debt Coverage by Assets: NC's debt is covered by short term assets (assets are 24.3x debt).


Next Steps

Dividend

What is NACCO Industries's current dividend yield, its reliability and sustainability?

1.57%

Current Dividend Yield


Dividend Yield vs Market

company1.6%marketbottom25%1.4%markettop25%3.7%industryaverage4.1%forecastin3Yearsn/a

Current dividend yield vs market & industry

Notable Dividend: NC's dividend (1.58%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: NC's dividend (1.58%) is low compared to the top 25% of dividend payers in the US market (3.66%).


Stability and Growth of Payments

Stable Dividend: NC's dividend payments have been volatile in the past 10 years.

Growing Dividend: NC's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (11.2%), NC's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: Insufficient data to determine if a dividend will be paid in 3 years and that it will be covered by earnings.


Next Steps

Management

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

3.8yrs

Average management tenure


CEO

John Butler (58yo)

2.3yrs

Tenure

US$3,301,092

Compensation

Mr. John C. Butler, Jr., has been the Chief Executive Officer and President of The North American Coal Corporation since July 1, 2015. Mr. Butler has been the President and Chief Executive Officer of NACCO ...


CEO Compensation Analysis

Compensation vs Market: John's total compensation ($USD3.30M) is above average for companies of similar size in the US market ($USD1.70M).

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


Management Age and Tenure

3.8yrs

Average Tenure

49yo

Average Age

Experienced Management: NC's management team is considered experienced (3.8 years average tenure).


Board Age and Tenure

7.7yrs

Average Tenure

69yo

Average Age

Experienced Board: NC's board of directors are considered experienced (7.7 years average tenure).


Insider Trading

Insider Buying: NC insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$37,23005 Nov 19
Elizabeth Loveman
EntityIndividual
Role
Chief Financial Officer
VP, Controller & Principal Financial Officer
Shares747
Max PriceUS$49.84
SellUS$25,20804 Nov 19
Elizabeth Loveman
EntityIndividual
Role
Chief Financial Officer
VP, Controller & Principal Financial Officer
Shares500
Max PriceUS$50.42
SellUS$73,72908 May 19
David Taplin
EntityIndividual
Shares1,500
Max PriceUS$49.15

Ownership Breakdown

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


Management Team

  • John Butler (58yo)

    President

    • Tenure: 2.3yrs
    • Compensation: US$3.30m
  • Greg Salyers (58yo)

    Senior Vice President of Global Operations of HBB

    • Compensation: US$802.68k
  • Christina Kmetko

    Investor Relations Consultant

    • John Neumann (43yo)

      VP, General Counsel & Secretary

      • Tenure: 7.3yrs
      • Compensation: US$841.73k
    • Elizabeth Loveman (49yo)

      VP, Controller & Principal Financial Officer

      • Tenure: 5.6yrs
      • Compensation: US$544.77k
    • Robert Strenski (62yo)

      President of KC

      • Tenure: 5yrs
    • Thomas Maxwell (41yo)

      VP of Financial Planning & Analysis and Treasurer

      • Tenure: 2.3yrs
    • Sarah Fry (43yo)

      Associate General Counsel & Assistant Secretary

      • Tenure: 2.7yrs

    Board Members

    • Al Rankin (78yo)

      Non-Executive Chairman

      • Tenure: 25.7yrs
      • Compensation: US$2.69m
    • John Butler (58yo)

      President

      • Tenure: 2.3yrs
      • Compensation: US$3.30m
    • Dennis LaBarre (76yo)

      Independent Director

      • Tenure: 38yrs
      • Compensation: US$184.43k
    • Britton Taplin (62yo)

      Independent Director

      • Tenure: 28yrs
      • Compensation: US$156.50k
    • Richard de Osborne (85yo)

      Independent Director

      • Tenure: 22yrs
      • Compensation: US$188.44k
    • Michael Miller (67yo)

      Independent Director

      • Tenure: 3.4yrs
      • Compensation: US$181.05k
    • John Jumper (74yo)

      Independent Director

      • Tenure: 8yrs
      • Compensation: US$181.01k
    • David B. Williams (49yo)

      Director

      • Tenure: 7.3yrs
      • Compensation: US$158.05k
    • Timothy Light (61yo)

      Independent Director

      • Tenure: 2.3yrs
      • Compensation: US$161.05k
    • John Dalrymple (71yo)

      Independent Director

      • Tenure: 2.3yrs
      • Compensation: US$158.05k

    Company Information

    NACCO Industries, Inc.'s company bio, employee growth, exchange listings and data sources


    Key Information

    • Name: NACCO Industries, Inc.
    • Ticker: NC
    • Exchange: NYSE
    • Founded: 1913
    • Industry: Coal and Consumable Fuels
    • Sector: Energy
    • Market Cap: US$339.294m
    • Shares outstanding: 6.99m
    • Website: https://www.nacco.com

    Number of Employees


    Location

    • NACCO Industries, Inc.
    • 5875 Landerbrook Drive
    • Suite 220
    • Cleveland
    • Ohio
    • 44124
    • United States

    Listings

    TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
    NCNYSE (New York Stock Exchange)YesClass A Common StockUSUSDJan 1968

    Biography

    NACCO Industries, Inc., together with its subsidiaries, operates surface mines that supply bituminous coal and lignite primarily to power generation companies. The company mines coal in North Dakota, Texas, Mississippi, Louisiana, and on the Navajo Nation in New Mexico. It provides value-added services, including maintaining and operating draglines and other equipment under contracts with the sellers of aggregates; coal handling, processing, and drying services; and surface and mineral acquisition, and lease maintenance services. The company serves electric utilities, independent power providers, activated carbon producers, and synfuels plants. NACCO Industries, Inc. was founded in 1913 and is headquartered in Cleveland, Ohio. 


    Company Analysis and Financial Data Status

    All financial data provided by Standard & Poor's Capital IQ.
    DataLast Updated (UTC time)
    Company Analysis2020/01/19 23:39
    End of Day Share Price2020/01/17 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.