Seeking Alpha • Mar 29

Natural Resource Partners: Nearing Debt-Free Status, But Margin Of Safety Shrinks (Rating Downgrade)

Summary Natural Resource Partners L.P. (NRP) is downgraded to Buy, as its valuation now reflects a weaker margin of safety, amid persistent industry weakness compared to the levels from months ago. NRP continues aggressive debt reduction, nearing a fortress balance sheet, with only $33 million left to repay and $30.1 million in cash on the balance sheet. Distribution increases are delayed, due to a $39.2 million soda ash JV investment, but higher payouts and buybacks are expected post-deleveraging. Near-term commodity price gains from the Iran conflict may be fleeting and weak fundamentals could persist, but NRP's intrinsic value still remains above current levels. Read the full article on Seeking Alpha

Seeking Alpha • Jan 08

Natural Resource Partners Appears Almost Fully Valued Around Its 10-Year Highs

Summary Natural Resource Partners has benefited from strong royalty income but is vulnerable to commodity cycles, making it suitable for risk-tolerant investors only. The company has significantly reduced debt and improved its balance sheet, enhancing resilience to downturns. Despite recent earnings moderation, the stock appears reasonably valued, with limited downside absent a major commodity downturn. Investors should be cautious of the stock's high cyclicality and potential steep declines during adverse economic periods. Read the full article on Seeking Alpha

Seeking Alpha • Sep 17

Natural Resource Partners: Misunderstood Royalty Biz

Summary NRP owns mineral rights to 13 million acres in the Appalachia Basin and Wyoming, collecting royalties from coal lessees. The royalties business model is advantageous due to its low operational costs and high free cash flow potential. Despite coal's decline, NRP's near-term stability and efficient business model make it a noteworthy investment consideration as Met coal has a very different outlook compared to perception. Read the full article on Seeking Alpha

Seeking Alpha • Apr 15

Natural Resource Partners Appears To Be Approaching Fair Value

Summary Natural Resource Partners owns mineral rights to both steam and met coal assets, as well as a stake in a Wyoming soda ash plant. 2023 results were strong, leading to a rally in the units, but the cyclical nature of the coal and soda ash markets may start to limit further upside. The soda ash business performed well in 2023, with the highest annual distribution ever received by NRP, while management has shown robust capital allocation and incentives. Carbon-neutral projects have performed less well than I had hoped. Read the full article on Seeking Alpha

Seeking Alpha • Nov 09

Natural Resource Partners: Well-Diversified With A Well-Supported Dividend Yield

Summary Natural Resource Partners has seen a 60% increase in shares and offers a dividend yield of over 4%. NRP focuses on generating revenue through its mineral portfolio, with the majority of its income coming from royalty and mineral rights. The company has made significant improvements in its financial performance, with a low P/E ratio and strong free cash flow supporting its dividend. Read the full article on Seeking Alpha

Seeking Alpha • Oct 18

Natural Resource Partners: Differentiated Resource Play With Economic Leverage On Capital

Summary Natural Resource Partners has improved its capital structure and enjoys cost differentiation benefits, driving economic returns. Broad market coal pricing continues at elevated rates compared to pre-pandemic range. Technical indicators corroborate further upside potential for NRP's stock price, with fundamental backing to a target of $111-$119 per share. Read the full article on Seeking Alpha

Seeking Alpha • Jul 25

Natural Resource Partners Continues To Impress

Summary Natural Resource Partners L.P. has significantly improved its financial position since 2015, reducing its asset base by half and nearing its goal of retiring all outstanding debt. The firm's business model, which involves leasing its mineral rights to operating companies, has allowed it to generate significant free cash flow and support growing distributions to unitholders. Despite its strong performance and high FCF yield of 32.86%, NRP is currently trading at a price-earnings multiple of just 4.24, suggesting the market is undervaluing it. Read the full article on Seeking Alpha

Seeking Alpha • Jun 03

Natural Resource Partners: Asset Optimization Fostering Growth

Summary Natural Resource Partners L.P. (NRP) is a strong buy due to its solid dividend, strong ROIC, asset optimization, and undervaluation based on DCF figures. NRP's asset management and optimization strategy includes operational efficiency, long-term contracts, diversification, and seizing growth opportunities. Risks include commodity price volatility and environmental and regulatory factors. Read the full article on Seeking Alpha

Seeking Alpha • Jan 31

Natural Resource Partners Appears Inexpensive With Multiple Ways To Win

Summary Natural Resource Partners (NRP) is multi-faceted with coal mineral rights, soda ash and CO2 sequestration exposure. If you believe in carbon sequestration, the units may be very cheap, if not, you may still see a return from rapid deleveraging. Management holds a material position, the CEO holds almost a 20% stake. The business is conservatively worth $66/unit today and that could increase with ongoing deleveraging to $93/unit on a 2-year view (assuming coal pricing remains strong). It's easy to see why Natural Resources Partners (NRP) would be overlooked by the market, it's a K-1 filer, part of its earnings relate to coal and the stock has already had a good run along with many commodity-related plays. Data by YCharts However, NRP does appear attractively valued, the portion of the soda ash business that they don't own may be about to receive a transaction value that suggests undervaluation at NRP, and there's a material ESG play here via CO2 sequestration. Also, there's incentive alignment, management has been diligent in paying down debt and insiders own 25% of the units (CEO owns almost 20%). Finally, mineral rights plays are great businesses, they take a payment off the top from coal shipments from their land. This means they have virtually no costs and falling coal prices are less of a hit to profits when compared to running an operating business. Valuation I'll jump to the valuation because that's what gives me confidence in the units at these levels. Asset/Liability Value ($M) Notes Soda Ash Business (49% Stake) 447 $639M recent implied value (for 49% stake) based on a past transaction less 30% minority discount. This works out to approximately 11x current distribution cash flow that NRP receives. You can also triangulate this from the market cap of Sisecam Resources (SIRE), which owns the remaining 51% of the business for a current market cap of $474M at the time of writing, though the ownership structure at SIRE is more complex and buyout may be pending. Coal Mineral Rights 750 Current run rate is around 300M/year operating profit, I normalize to 150M and assume 5x multiple. There is a relatively broad spread of outcomes here depending on your views on coal for the next few years. This valuation may be somewhat conservative. CO2 sequestration capacity 172 Emerging business, 2 contracts in place currently, NRP may be able to own a material royalty on carbon storage (sequestration) on its acreage. As of Q3 2022 "carbon neutral initiative revenues" were $8.6M. These projects appear to utilize roughly 5% of available acreage and so full utilization may be roughly $172M, though the contract structure and payment are unclear. Capitalization of corporate costs 200 Assume 20M annual costs at 10x Estimated debt as of December 2022 100 149M as of September, assume further 50M of debt paydown to December 2022 Preferred Stock 250 Book value Resulting equity valuation 819 Per unit valuation $66/unit 12.5M units outstanding as of Sept 30, 2022 Sensitivities I believe the soda ash valuation is relatively robust, and I suspect NRP could even sell it's stake to Sisecam (the Turkish firm that controls the remaining 51% of the soda ash asset) at around that valuation if it wished to. That said, I don't think management wants to sell this attractive business. No Future For Sequestration However, the valuation for coal royalties and CO2 sequestration are more debatable. If you believe the CO2 sequestration business is worthless, then the valuation falls to $52/unit, which is around the current price. However, if you think this, you also have to explain why they have taken in millions on current contracts. Full Deleveraging In terms of debt, the company is producing significant free-cash-flow currently, if that's sufficient to pay down all remaining debt and take out the preferreds over the next 18 months or so, then the 'debt-free' valuation rises to $93/unit. Bullish On Coal Regarding coal if you assume current earnings persist for the next five years, or are willing to consider a 10x multiple, then the valuation rises to $125/unit. So in summary, you have to have some belief that carbon sequestration will become a meaningful business over time or believe coal prices will remain elevated for a few more years to see major upside from here. However, conversely there doesn't seem to be obvious downside unless both coal and soda ash see sharp profitability declines, as at steady state the cash generation of this business is significant compared to the value of the units. Soda Ash Is a Great Business Soda Ash is a great, stable business. Soda ash is used primarily to make glass but has many other uses from batteries to cleaning products. The Wyoming asset is a low-cost, natural producer. Price volatility is low, and the Wyoming site may expand production 40% over the coming years. Currently NRP receives $10M in quarterly distributions, but this may increase. Sisecam Investor Presentation Not Coal, But Mineral Rights Yes, the company derives significant earnings from royalties from coal mining on its land today. Though even here we should note that around half of this business is metallurgical coal (an ingredient for steel production, not a fuel as such). However, the future may look quite different, the same land can be used for CO2 sequestration projects, and this is starting to happen, though the company hasn't split out the earnings yet in full detail. Other uses for the land such as geothermal energy projects and earning credits for carbon sequestration through forestry, are possible too. This is what NRP said regarding carbon sequestration in their most recent 10-Q (for September 2022).

Seeking Alpha • Jan 18

Natural Resource Partners: Transforming The Appeal Of Their Units

Summary Natural Resource Partners L.P. has benefited immensely as coal prices surged following the Russian invasion of Ukraine. They played their hand very well, mostly by focusing on deleveraging to remove risks. Since these booming operating conditions have persisted longer than I previously envisioned, it raises the prospect they will reach their zero-debt goal in 2023. This would significantly boost their operating cash flow by removing their interest expense, thereby transforming the appeal of their units. Until more certainty comes to light regarding how this cash would be utilized in the future, I still believe that my hold rating for Natural Resource Partners L.P. is appropriate. Introduction When the global energy shortage hit markets early in 2022, Natural Resource Partners L.P. (NRP) played their hand very well. To give credit where due, they exceeded my expectations, as my previous article discussed. Subsequently, operating conditions have continued to perform better than envisioned and when looking ahead, they are transforming the appeal of their units as they push towards their zero-debt goal. Coverage Summary & Ratings Since many readers are likely short on time, the table below provides a brief summary and ratings for the primary criteria assessed. If interested, this Google Document provides information regarding my rating system and, importantly, links to my library of equivalent analyses that share a comparable approach to enhance cross-investment comparability. Author Detailed Analysis Author The start of 2022 was extremely strong for the energy sector, especially those with coal exposure, as the Russian invasion of Ukraine sent the world into a severe energy shortage, thereby lifting all proverbial boats from natural gas to oil and even the often-hated, coal. To my surprise, these booming operating conditions persisted well past the second quarter and thus, as a result, their operating cash flow surged ahead during the third quarter, thereby hitting $198m across the first nine months. This once again marks a massive change year-on-year against their previous result of $66.6m across the first nine months of 2021. Author When moving to a quarterly basis, it shows the third quarter of 2022 marked the fifth consecutive sequential improvement at the underlying level that excludes working capital movements with a result of $81.8m. Since both thermal and metallurgical coal prices have remained strong throughout the recently ended fourth quarter and thus far into 2023, notwithstanding their usual volatility, Natural Resource Partners L.P. should continue seeing at least a few more quarters of booming cash flow performance, if not possibly longer as China reopens its economy. Whilst this is undoubtedly positive, it does largely come down to luck because coal prices are not the actions of management. That said, Natural Resource Partners L.P. continues to play its hand very well. In light of these booming operating conditions persisting longer than I previously envisioned, it is actually transforming the appeal of their units as they push towards their zero-debt goal, as per the commentary from management included below. “We have seized this opportunity to accelerate our plan to become debt-free and redeem all of our preferred units.” “We look forward to becoming debt-free as our business continues to generate cash.” -Natural Resource Partners Q3 2022 Conference Call. Apart from obviously reducing risks, hitting their zero-debt goal would also provide a significant boost to their cash flow performance going forwards, thereby boosting the appeal of their units. Whilst this stands to help every year, the most notable benefit comes in years with normalized coal prices because during these times, their interest expense weighed down their operating cash flow far more significantly. Take 2021 for example. Natural Resource Partners L.P. generated operating cash flow of $121.8m, but importantly, this was weighed down by interest expense of $38.9m. If removed, this would boost their result by almost one-third, which is a very impressive change, all without requiring either higher coal prices, higher production nor lower costs. This would translate into their accompanying free cash flow, thereby boosting it from $99.2m to $138.1m. Thus, even with these normalized operating conditions, they would see a massive free cash flow yield of over 20% at their current market capitalization of approximately $625m. Whereas, take the first nine months of 2022, for example, they generated operating cash flow of $198m in conjunction with interest expense of $22.6m, which means it was weighed down a less painful circa 11%. Therefore, this highlights how the benefits of reaching their zero-debt goal boosts their appeal during normalized operating conditions and downturns more notably than during these recent booming operating conditions. Apart from increasing the scope for unitholder returns, this also reduces the downside risk, which in my eyes is equally as important as lifting upside potential and thus transforming the appeal of their units. When it comes to operating cash flow, it can either be retained to boost their cash balance, utilized to deleverage via repaying debt, returned to unitholders via distributions and unit buybacks or if not, it can be invested in growth. Seeing as they are a mineral rights partnership, they run with virtually no capital expenditure and throughout their previously linked third quarter of 2022 conference call, I could see no discussions of acquisitions or mergers. Whilst this may change in the future, as it stands right now there do not appear to be any concrete plans in this regard. Now circling back to the other paths, this leaves Natural Resource Partners L.P. unitholder returns as the most likely viable path once reaching their zero-debt goal, which is positive. That said, it remains unknown how these would be split between distributions and unit buybacks, the latter of which I hope they avoid. Apart from the inherent volatility of their industry making it more likely to see these weighted towards the top of the cycle when free cash flow is highest, along with their unit price, Natural Resource Partners L.P. also faces long-term threats from the clean energy transition given their thermal coal exposure. Elsewhere, management noted an accompanying goal of redeeming the entirety of their preferred units, thereby also eliminating their preferred distributions. When it comes to this goal, it is done at a steady rate whilst they continue making the associated distribution payments and thus does not require additional consideration, as per the commentary from management included below. “They are perpetual. And they are preferred equity and the liquidation price is 1.85x, which decreases as we continue to pay preferred unit distributions.” -Natural Resource Partners Q3 2022 Conference Call (previously linked). Author Unsurprisingly, their accelerating cash flow performance during the third quarter of 2022 translated into even faster deleveraging that as a result, saw their net debt plunge to $177.8m versus its previous level of $239m following the second quarter. It is very impressive to see one-quarter of their net debt wiped away during merely one quarter of a year and thus roughly indicates they may reach their zero debt goal following the third quarter of 2023 but obviously, it remains heavily dependent upon coal prices. Even if not this soon, it should be forthcoming not too much later and in the meantime, Natural Resource Partners L.P. interest expense should continue falling and thus unlocking more free cash flow as more quarters pass.

Seeking Alpha • Nov 02

Natural Resource Partners Remains Attractive

Summary Since our first bullish thesis, the share price has fallen nearly 10.2%. Nevertheless, the company’s underlying fundamentals are strong. Industry-wide trends give the company a path to future profitability and strong stock market performance. The company has a low PE multiple and an FCF yield of over 26%, making it very attractive. With third quarter results expected, this is a good time to review our initial bullish thesis on Natural Resource Partners LP (NRP). We shall see that the company's fundamentals remain strong, and that broader industry trends provide a path to strong future returns and improved market performance. Since we first discussed Natural Resource Partners, the share price has fallen nearly 10.2%, despite our bullish thesis. Year-to-date, the stock is up more than 27%. Source: Natural Resource Partners LP As we pointed out, the company has, across its life, been a terrible investment. Since listing in 2002, shareholders have earned a total return of -8.51%, at a compound annual growth rate of -0.44%. Source: Natural Resource Partners LP In the five-year period, the company has given investors a total return of 75.86%, for a five-year CAGR of 11.97%. Source: Natural Resource Partners LP Natural resource Partners' strong performance over the last five years reflects its underlying economics and broader trends in the industry. Metals And Mining Are Thematically Correct The framework underpinning our first thesis is that the asset growth effect drives returns in commodity businesses. Discovered in 2007 by Michael J. Cooper, Huseyin Gulen, and Michael J. Schill, the effect refers to how asset growth predicts future abnormal returns. This is true at the business level and the industry level. Marathon Asset Management refers to how the asset growth effect manifests itself across time as the capital cycle. The capital cycle is particularly strong with commodity companies, which are price takers, and whose capital expenditure decisions occur years, sometimes decades before prices can be observed. This leads to under or overshooting of supply, and when capex decisions are taken during boom periods, the tendency is toward oversupply and declining future returns. Basically, because commodity firms are price takers, they have a tendency to chase the direction of market prices when they make capex decisions. When prices rise, capex expands, when prices fall, capex plummets. An inverse relationship is created between the supply of capital and future returns. Thus, Natural Resource Partners' results are unremarkable once you consider the performance of the MSCI ACWI World Metals and Mining Index. Look at the chart showing Natural Resource Partners' returns since IPO, and the chart below, and they're clearly strongly correlated. In the last decade, the MSCI ACWI World Metals and Mining Index has returned 0.78% a year, compared to 7.28% for the MSCI ACWI, and 8.11% for the MSCI World Index. In the year-to-date, the MSCI ACWI Metals and Mining is down 17.97%, while the MSCI ACWI is down 25.63% and the MSCI World is down 25.42%. Recent results show that the industry as a whole is down, but, it's performing better than the general market. While not a perfect match - the asset growth effect does not suggest that - we are reinforced in our belief that metals and mining are the right theme for an investor. Source: MSCI ACWI World Metals and Mining Index Natural Resource Partners' results for the year are strongly positive. The question is, is the company still an attractive investment? Strong Financial Performance In the last five years, revenue has declined from $378.017 million in 2017, to $216.364 million in 2021, for a five-year revenue CAGR of -10.56%. In the period between 1950 and 2015, just 1.6% of firms achieved similar levels of revenue decline, according to Credit Suisse's The Base Rate Book. This decline reflects the secular decline of coal usage across the world. In the trailing twelve months, revenue was $330.35 million, reflecting the boom in commodity prices in the wake of Russia's invasion of Ukraine. Source: Credit Suisse Revenue derives from two segments: mineral rights and soda ash. Source: 2021 Annual Report The mineral rights segment is dominated by coal revenues. Of the $194 million the company earned from the segment, $104 million came from coal. The decline in revenues over the last five years is not anomalous. It reflects the secular decline in the use of coal. However, this is not necessarily an impediment to profitability, and, for Natural Resource Partners, it has not been. Gross profitability, meanwhile, has risen marginally from 0.18 in 2017, to nearly 0.2 in 2021. This is during a period when revenue declined markedly. Referring to the asset growth effect, it's notable that total assets declined from nearly $1.39 billion in 2017, to nearly $954 million in 2021. While the company's profitability has improved, it's still far from the 0.33 threshold that marks a stock out as attractive, according to Robert Novy-Marx's research. In the TTM period, gross profitability has risen to 0.29, inching toward 0.33. Natural Resource Partners' shrinking asset base reflects broader trends in the metals and mining industry. Globally, the 20 largest miners have significantly reduced their capital expenditure over the last decade. Although capex has risen since the pandemic, it remains well below the high levels of a decade ago. The effect of contracting capex has been to improve returns, and, so far, that has held. In 2023, capex growth is expected to fall, with capex expected to rise more than 20% in 2022. Once again, Natural Resource Partners' must be understood in relation to the broad market. Source: Mining Technology Operating margin in 2017 was 48.67%, rising to 68.3% in 2021. In the TTM period, operating margin rose to 77.7%. This is higher than the aggregate and median operating margin for the 1,000 largest firms in the United States, during the 1950 to 2015 period. Source/ Credit Suisse In 2017, the company reported net income attributable to common unitholders of over $61.95 million, which rose to $75.75 million in 2021, for a five-year net income CAGR of 4.1%. That gives us a base rate of 34.1% of companies. In the TTM period, net income attributable to common unitholders has risen to $183.44 million. Source: Credit Suisse Free cash flow rose marginally from over $121 million in 2017, to nearly $123 million in 2021. In the TTM period, FCF is $202 million. Source: Natural Resource Partners' Citi One-On-One Midstream/Energy Infrastructure Conference Presentation The company has used its ability to generate meaningful FCF to pay down its debt, de-risk its capital structure, and increase shareholder equity. Since 2015, Natural Resource Partners has repaid over $1 billion in debt. At the end of the year, the company expected to have just $242 million in debt outstanding. Once again returning to our asset growth effect thesis, there's an inverse relationship between asset size and future returns, and the company's actions bode well for the future. Source: Natural Resource Partners' Citi One-On-One Midstream/Energy Infrastructure Conference Presentation Natural Resource Partners' return on invested capital has risen from 14.8% in 2017, to 31.3% in the TTM period. The chart below shows that this evolution has not been smooth, and, indeed, reflects the volatility of the sector. Nevertheless, ROIC does appear to be rising, suggesting the possibility of superior future returns.

Seeking Alpha • Sep 29

Natural Resource Partners to redeem outstanding 9.125% senior notes

Natural Resource Partners (NYSE:NRP) said Thursday it intends to redeem all outstanding 9.125% senior notes due 2025 on Oct. 31. The redemption price will be 102.281% of the principal amount plus accrued and unpaid interest to, but not including, the redemption date. The redemption will be funded with cash on hand and borrowings under NRP's recently extended credit facility.

Seeking Alpha • Aug 18

Natural Resource Partners: They Played Their Hand Very Well

Natural Resource Partners benefited immensely from the booming coal prices seen during the first half of 2022. This saw their operating cash flow almost match their full-year results from 2021, despite only being half the length of time. More importantly, they also played their hand very well by expediting repaying debt at a far quicker pace than I had previously expected. This means they are no longer trapped by their credit facility covenant leverage ratio limit, which unlocks their ability to push lift their distributions higher. Whilst sounding very positive, I still believe that maintaining a hold rating is appropriate, mostly due to their exposure to thermal coal. Introduction After narrowly avoiding a suspension of their distributions during 2021, Natural Resource Partners (NRP) received a lifeline from Eastern Europe in early 2022 due to the otherwise tragic Russian invasion of Ukraine, as my previous article discussed. Whilst the upside for their distributions still appeared limited at the time, they played their hand very well and exceeded my expectations to recently lift their distributions a very impressive two-thirds higher, which now sees their units offering a high 6.90% yield. Despite being very positive, it would still be wise for investors to keep their expectations tempered, as discussed within this follow-up analysis that also reviews their recently released results for the first half of 2022. Executive Summary & Ratings Since many readers are likely short on time, the table below provides a very brief executive summary and ratings for the primary criteria that were assessed. This Google Document provides a list of all my equivalent ratings as well as more information regarding my rating system. The following section provides a detailed analysis for those readers who are wishing to dig deeper into their situation. Author *Instead of simply assessing distribution coverage through distributable cash flow, I prefer to utilize free cash flow since it provides the toughest criteria and also best captures the true impact upon their financial position Detailed Analysis Author Their cash flow performance that enjoyed a solid recovery during the fourth quarter of 2021 picked up even more momentum during the first half of 2022 as the commodity markets surged ahead following the fallout of the Russian invasion of Ukraine. This lifted their operating cash flow to an extremely strong $115.5m during the first half of 2022, which is a momentous improvement year-on-year versus their previous result of only $36.6m during the first half of 2021. In fact, this was such a large increase that it almost matches their full-year result from 2021 of $121.8m, despite literally being only half the length of time. Even after funding their $34.6m of miscellaneous cash expenses, which were essentially entirely comprised of preferred distributions, they were still left with $81.4m of free cash flow for the first half of 2022. Since their new quarterly distributions of $0.75 per unit only cost $37.5m per annum given latest their outstanding unit count of 12,505,996, they clearly have scope to lift their distributions higher, especially since even 2020 saw free cash flow of $65m despite the severe downturn. Even though this sounds to be very positive given their existing yield is already a high circa 7%, investors should not lose sight of the medium to long-term. It is debatable how long these booming operating conditions and thus extremely strong cash flow performance will last but alas, it remains undeniable that commodities are inherently volatile and these booming operating conditions cannot realistically be expected to persist for a prolonged length of time. This dynamic is especially pertinent for thermal coal, which during 2021 comprised slightly more than half of the production from their mineral rights, as per my previously linked article. Even though the global energy shortage effectively provided a lifeline during the first half of 2022, its grim medium to long-term demand outlook persists with a secular decline on the horizon, as it remains a fuel of last resort in a world transitioning to clean energy. Whilst the short-term sees a mixed outlook given the battle between the global energy shortage and risks of a recession, when looking further into the future, thermal coal still sees a secular decline that will hinder their free cash flow. On the other hand, their metallurgical coal mineral rights production is utilized to make steel and clearly sees a better medium to long-term outlook but is still susceptible to an economic slowdown in the short-term, which is now widely discussed and arguably even expected as the federal reserve hikes interest rates to combat inflation. It should also be considered that their immense free cash flow comes on the back of literally zero capital expenditure. This is normal for mineral rights partnerships but it does not alter the fact that even forgetting the questionable long-term future for thermal coal, their assets are being depleted each year via production and thus need to be eventually replaced. They have managed to avoid making any sizable investments or acquisitions during the past three years, although one day, this will need to change and as a result, it will hinder their free cash flow and thus no matter the views an investor holds for thermal coal, it would be prudent to keep their distribution expectations tempered. Author Even after funding preferred distributions on top of their common distributions during the first half of 2022, their massive cash windfall still saw their net debt plummet to $239m and thus $59m or 19.80% lower than where it ended 2021 at $298m. Whilst already an impressive improvement, their total debt saw a far larger decrease of $135.2m, which as subsequently discussed, actually comes as a surprise given their debt maturity profile. Author Following their extremely strong financial performance and significantly lower net debt, it was not surprising to see their leverage continue plummeting to new lows that were unimaginable only one year prior. They now enjoy a net debt-to-EBITDA and net debt-to-operating cash flow of 0.74 and 0.83 respectively, which are comfortably below the threshold for the very low territory of 1.00 and obviously mark a significant difference versus their previous respective results of 1.74 and 2.45 at the end of 2021. When looking ahead, their leverage should continue seeing downwards pressure as their net debt trends ever lower, although fluctuations in their financial performance will ultimately determine where it lands. Author Even though their respective current and cash ratios dipped during the first half of 2022 to 1.69 and 1.00 versus their previous respective results of 2.53 and 2.10 at the end of 2021, their liquidity still remains strong. The decrease largely stems from their cash balance being run down to $59.4m versus its previous level of $135.5m across these same two points in time, as they expedited repaying debt by $135.2m. As hinted at earlier, this far exceeded my expectations when conducting my previous analysis because their debt maturity profile only saw $39.4m during 2022 with the same once again during 2023 and only an even smaller amount of $31m during 2024, as per my previously linked article. To phrase this situation another way, the first half of 2022 saw them repay slightly more than the next three years of debt maturities. Apart from exceeding my expectations and further supporting their liquidity, more importantly, this also relieves the pressure from their credit facility covenant leverage ratio, which is based upon their total debt, not their net debt. Since they recently increased their quarterly distributions above their former level of $0.45 per unit to $0.75 per unit, its former limit has dropped from 4.00 to now only 3.00, as per my previously linked article. This is particularly low and when conducting the previous analysis, it was expected to deter management from increasing their distributions but thankfully for their unitholders, as they were able to repay debt far ahead of their scheduled maturities, they relieved this issue and thus lifted their distributions higher by two-thirds.

Seeking Alpha • May 20

Natural Resource Partners Is Poised To Perform Well In The New Era

The metals and mining sector has had a horrible decade and with it, Natural Resource Partners. Present conditions suggests that demand for minerals is set to increase and with that, the company is poised to grow and fatten profitability. In an era of de-globalization, the company’s assets will become more valuable. Natural Resource Partners’ free cash flows are trading at a yield of 25.49% and the stock is cheap by historical and relative measures.

Seeking Alpha • Apr 09

Natural Resource Partners: Lifeline From Eastern Europe, Upside Remains Limited

Natural Resource Partners saw their distributions saved by the strong coal prices of late 2021. This also sent their cash flow performance surging higher, which if continued would see their best annual results in recent history since at least 2018. When looking ahead, their thermal coal production is heavily weighted towards the Illinois Basis and thus stands to benefit via exports to Europe following their ban on Russian imports. This would normally see prospects for distribution growth but sadly, an obscure term within their credit facility creates a problem since it would reduce their covenant leverage ratio limit. Since this limits their ability to reward unitholders, I only believe that upgrading to a hold rating from my previous sell rating is appropriate.

Snowflake Score
Valuation	4/6
Future Growth	0/6
Past Performance	2/6
Financial Health	5/6
Dividends	3/6

Historical stock prices
Current Share Price	US$102.74
52 Week High	US$128.60
52 Week Low	US$92.10
Beta	0.18
1 Month Change	-11.22%
3 Month Change	-16.65%
1 Year Change	8.72%
3 Year Change	111.97%
5 Year Change	461.42%
Change since IPO	5.92%

	NRP	US Oil and Gas	US Market
7D	-4.2%	1.1%	-0.8%
1Y	8.7%	37.4%	27.1%

NRP volatility
NRP Average Weekly Movement	3.0%
Oil and Gas Industry Average Movement	6.1%
Market Average Movement	7.2%
10% most volatile stocks in US Market	16.3%
10% least volatile stocks in US Market	3.2%

NRP fundamental statistics
Market cap	US$1.36b
Earnings (TTM)	US$113.42m
Revenue (TTM)	US$193.84m

NRP income statement (TTM)
Revenue	US$193.84m
Cost of Revenue	US$23.19m
Gross Profit	US$170.65m
Other Expenses	US$57.23m
Earnings	US$113.42m

Earnings per share (EPS)	8.56
Gross Margin	88.04%
Net Profit Margin	58.51%
Debt/Equity Ratio	9.5%

Natural Resource Partners dividend dates
Ex Dividend Date	May 19 2026
Dividend Pay Date	May 26 2026
Days until Ex dividend	4 days
Days until Dividend pay date	3 days

Data	Last Updated (UTC time)
Company Analysis	2026/05/21 16:42
End of Day Share Price	2026/05/21 00:00
Earnings	2026/03/31
Annual Earnings	2025/12/31

Package	Data	Timeframe	Example US Source ^*
Company Financials	10 years	Income statement Cash flow statement Balance sheet	SEC Form 10-K SEC Form 10-Q
Analyst Consensus Estimates	+3 years	Forecast financials Analyst price targets	Analyst Research Reports Blue Matrix
Market Prices	30 years	Stock prices Dividends, Splits and Actions	ICE Market Data SEC Form S-1
Ownership	10 years	Top shareholders Insider trading	SEC Form 4 SEC Form 13D
Management	10 years	Leadership team Board of directors	SEC Form 10-K SEC Form DEF 14A
Key Developments	10 years	Company announcements	SEC Form 8-K

Analyst	Institution
Peter Ward	Barclays
Mark Levin	Benchmark Company
Mark Levin	Seaport Research Partners

Natural Resource Partners (NRP) Stock Overview

Rewards

Risk Analysis

Natural Resource Partners L.P. Competitors

Alliance Resource Partners

Centrus Energy

NACCO Industries

XCF Global

Price History & Performance

Recent News & Updates

Dividend of US$0.75 announced

Natural Resource Partners Faces Soda Ash Losses and Coal Volume Weakness in Q1 2026 Results

Natural Resource Partners L.P. Declares Cash Quarterly Distribution on Common Units for First Quarter Ended March 31, 2026 , Payable on May 26, 2026

First quarter 2026 earnings released: EPS: US$1.46 (vs US$3.01 in 1Q 2025)

Natural Resource Partners L.P. to Report Q1, 2026 Results on May 06, 2026

Natural Resource Partners: Nearing Debt-Free Status, But Margin Of Safety Shrinks (Rating Downgrade)

Recent updates

Dividend of US$0.75 announced

Natural Resource Partners Faces Soda Ash Losses and Coal Volume Weakness in Q1 2026 Results

Natural Resource Partners L.P. Declares Cash Quarterly Distribution on Common Units for First Quarter Ended March 31, 2026 , Payable on May 26, 2026

First quarter 2026 earnings released: EPS: US$1.46 (vs US$3.01 in 1Q 2025)

Natural Resource Partners L.P. to Report Q1, 2026 Results on May 06, 2026

Natural Resource Partners: Nearing Debt-Free Status, But Margin Of Safety Shrinks (Rating Downgrade)

Dividend of US$0.12 announced

Full year 2025 earnings released: EPS: US$10.18 (vs US$11.69 in FY 2024)

Natural Resource Partners L.P. Announces Special Cash Distribution, Payable on March 17, 2026

Natural Resource Partners L.P. to Report Q4, 2025 Results on Feb 27, 2026

Dividend of US$0.75 announced

Natural Resource Partners L.P. Declares Distribution for the Fourth Quarter of 2025, Payable on February 24, 2026

Dividend of US$0.75 announced

Natural Resource Partners L.P. Declares Cash Distribution for the Third Quarter 2025, Payable on November 25, 2025

Third quarter 2025 earnings released: EPS: US$2.31 (vs US$2.04 in 3Q 2024)

Natural Resource Partners L.P. to Report Q3, 2025 Results on Nov 04, 2025

Insider recently sold US$863k worth of stock

Insider notifies of intention to sell stock

Second quarter 2025 earnings released: EPS: US$2.55 (vs US$2.33 in 2Q 2024)

Natural Resource Partners L.P. Declares Second Quarter 2025 Cash Distribution, Payable on August 26, 2025

Natural Resource Partners L.P. to Report Q2, 2025 Results on Aug 06, 2025

Dividend of US$0.75 announced

First quarter 2025 earnings released: EPS: US$3.01 (vs US$4.13 in 1Q 2024)

Natural Resource Partners L.P. Declares First Quarter 2025 Cash Distribution, Payable on May 27, 2025

Natural Resource Partners L.P. to Report Q1, 2025 Results on May 06, 2025

Investor sentiment improves as stock rises 17%

Dividend of US$1.21 announced

Full year 2024 earnings released: EPS: US$11.69 (vs US$15.59 in FY 2023)

Natural Resource Partners L.P. to Report Q4, 2024 Results on Feb 28, 2025

Key Executive exercised options and sold US$2.3m worth of stock

Dividend of US$0.75 announced

Natural Resource Partners L.P. Declares Fourth Quarter 2024 Distribution, Payable on February 25, 2025

Natural Resource Partners Appears Almost Fully Valued Around Its 10-Year Highs

Investor sentiment improves as stock rises 18%

Dividend of US$0.75 announced

Third quarter 2024 earnings released: EPS: US$2.04 (vs US$3.40 in 3Q 2023)

Natural Resource Partners L.P. Declares Third Quarter 2024 Cash Distribution, Payable on November 26, 2024

Natural Resource Partners L.P. to Report Q3, 2024 Results on Nov 05, 2024

Natural Resource Partners: Misunderstood Royalty Biz

Second quarter 2024 earnings released: EPS: US$2.33 (vs US$2.93 in 2Q 2023)

Natural Resource Partners L.P. Declares Second Quarter 2024 Cash Distribution, Payable on August 27, 2024

Natural Resource Partners L.P. to Report Q2, 2024 Results on Aug 07, 2024

Dividend of US$0.75 announced

Natural Resource Partners L.P. Declares Dividend for First Quarter 2024, Payable on May 28, 2024

First quarter 2024 earnings released: EPS: US$4.13 (vs US$4.40 in 1Q 2023)

Natural Resource Partners L.P. to Report Q1, 2024 Results on May 07, 2024

Natural Resource Partners Appears To Be Approaching Fair Value

Natural Resource Partners L.P. Declares Special Cash Distribution, Payable on March 26, 2024

Full year 2023 earnings released: EPS: US$15.59 (vs US$18.72 in FY 2022)

Natural Resource Partners L.P. to Report Q4, 2023 Results on Mar 07, 2024

Key Executive exercised options and sold US$2.5m worth of stock

Dividend of US$0.75 announced

Natural Resource Partners L.P. Declares Fourth Quarter 2023 Common Distribution, Payable on February 27, 2024

Investor sentiment improves as stock rises 15%

Board Member recently bought US$223k worth of stock

Natural Resource Partners: Well-Diversified With A Well-Supported Dividend Yield

Natural Resource Partners L.P. Declares Cash Distribution for the Third Quarter of 2023, Payable on November 21, 2023

Third quarter 2023 earnings released: EPS: US$3.40 (vs US$5.25 in 3Q 2022)

Natural Resource Partners: Differentiated Resource Play With Economic Leverage On Capital

Natural Resource Partners L.P. to Report Q3, 2023 Results on Nov 03, 2023

Investor sentiment improves as stock rises 18%

Upcoming dividend of US$0.75 per share at 4.4% yield

Natural Resource Partners L.P. Declares Dividend for the Second Quarter of 2023, Payable on August 23, 2023