METC Stock Overview
Ramaco Resources, Inc. produces and sells metallurgical coal.
Ramaco Resources Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$9.27|
|52 Week High||US$21.73|
|52 Week Low||US$8.43|
|1 Month Change||-11.21%|
|3 Month Change||-27.64%|
|1 Year Change||-24.70%|
|3 Year Change||158.22%|
|5 Year Change||35.53%|
|Change since IPO||-31.59%|
Recent News & Updates
Ramaco raises dividend by 3% to $0.1133
Ramaco (NASDAQ:METC) declares $0.1133/share quarterly dividend, 3% increase from prior dividend of $0.1100. Forward yield 5.01% Payable Dec. 15; for shareholders of record Dec. 1; ex-div Nov. 30. See METC Dividend Scorecard, Yield Chart, & Dividend Growth.
Ramaco Resources: An Overreaction As Cash Flows Remain Strong
Ramaco Resources posted its Q2 results which were a tad light due to a delayed shipment of 90,000 tonnes (representing $9M+ in operating cash flow). Those tonnes will be shipped in the current semester so this is merely a delay in revenue and cash flow. The incoming cash flows should be more than sufficient to cover the sustaining + growth capex. The production rate will increase to 4.3 million tonnes in 2023. If all tonnes are sold, that would represent an 80-90% improvement over H1 2022. Ramaco bought a new mine and estimates it needs just two years as a payback period (based on the spot price). Introduction I have been keeping an eye on Ramaco Resources (METC) (METCL) for over a year now and I initially just purchased the 9% yielding senior notes. As the yield to call of those notes continued to decrease, I sold my entire position. Meanwhile I was still writing put options on Ramaco Resources' common shares and it looks like I will end up with a long position after the most recent share price drop. I wanted to dig into the Q2 results to make sure that was the right decision and wanted to figure out if I should perhaps write more put options or cut my losses. METC data by YCharts The financial results weren't bad at all, the late shipment is just a minor nuisance During the second quarter, the company produced just under 670,000 tonnes of coal but was only able to sell approximately 578,000 tonnes of coal. This means Q2 was the second quarter wherein Ramaco sold less coal than it produced. In the first half of the year, Ramaco produced 1.33 million tonnes of coal but only sold 1.17 million tonnes. The remaining coal is held in inventory and will obviously be sold over the next few months. Ramaco Resources Investor Relations The total revenue in the second quarter was approximately $137M, and after deducting all expenses, the operating income came in at just under $43M. That's lower than in the first quarter of the year as Ramaco generated a higher average sales price (fewer tonnes were sold domestically) at a slightly lower operating cost. Despite this, the net income of $33.3M still represented an EPS of $0.75 which is hardly anything to sneeze about. Ramaco Resources Investor Relations In the first semester, the reported operating cash flow came in at $109.3M. That includes some changes in the working capital position (including an inventory build-up which I will discuss below). Adjusted for these working capital changes, Ramaco's operating cash flow was $102.9M and roughly $100M after deducting the lease payments. As a reminder, this is based on selling 1.15 million tonnes of coal at an average price of $224/t. Ramaco Resources Investor Relations The total capex in the first semester was $54M resulting in an underlying free cash flow of $46M or just over $1/share for the semester. The capex is high (and will be even higher in the second half of the year) as Ramaco is expanding its operations as it aims to produce 4.3 million tonnes of coal in 2023. The sustaining capex is likely just around $8-12M per quarter considering $70M of the current $105-125M capex guidance consists of growth capex. Ramaco Resources Investor Relations This means the Q2 results were OK. Not spectacular, but also not bad. One element that has likely contributed to the underwhelming market reaction is the inventory build-up due to rail delays. Ramaco confirmed it produced approximately 90,000 tonnes of coal that were originally anticipated to be shipped into the higher price export markets but those tonnes will now only be shipped in Q3 and as such recorded as Q3 revenue and cash flow. This will likely result in a stronger than anticipated cash flow in the second half of the year as the volumes have just shifted: The coal isn't just suddenly "gone." The company even calls it a blessing in disguise as some of the newer contracts for delivery in the second half of the year are now generating higher margins than anticipated. Ramaco mentions it signed a contract in July for the delivery of 250,000 tonnes of lower-grade metallurgical coal later this semester at a thermal coal index linked price. At the time the contract was signed, Ramaco anticipated a netback of $250/t so this batch of 250,000 tonnes will generate in excess of $60M in cash flow. This depends on the coal price and looking at the API2 coal price index, the index is now trading about $60/t lower than in July so perhaps we should adjust the expectations accordingly. Ramaco Resources Investor Relations The acquisition of Maben So while Q2 (and H1) was a bit lighter than expected, the situation isn't nearly as dramatic as what the 18% share price drop makes you think. Perhaps the market was also caught off-guard with the announcement Ramaco is spending $30M on a new acquisitions. It's purchasing Maben Coal from Appleton Coal LLC for $9M in cash payable to the seller and an additional $21M payable from the proceeds of a secured note payable to Investec Bank. The Maben Coal reserves total 33 million tonnes of coal of which 1.5 million tonnes will be mined immediately. The production is anticipated to start in Q4 2022 which means the total output in the current financial year will be negligible (25,000 tonnes) but Ramaco anticipates to produce 250,000 tonnes in 2023 at a cash cost of around $80/t. Add in the trucking costs to the Knox Creek preparation plant and a few additional expenses, and one could argue the all-in cost per tonne will be around $105-110/t, in line with the existing assets of the company. Based on the spot price of API2 as of August 4 (which was approximately $330/t) Ramaco anticipates a payback period of less than two years.
|METC||US Metals and Mining||US Market|
Return vs Industry: METC underperformed the US Metals and Mining industry which returned -14.2% over the past year.
Return vs Market: METC underperformed the US Market which returned -20.3% over the past year.
|METC Average Weekly Movement||9.5%|
|Metals and Mining Industry Average Movement||8.8%|
|Market Average Movement||6.9%|
|10% most volatile stocks in US Market||15.7%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: METC is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 10% a week.
Volatility Over Time: METC's weekly volatility (10%) has been stable over the past year.
About the Company
Ramaco Resources, Inc. produces and sells metallurgical coal. The company’s development portfolio includes the Elk Creek project consisting of approximately 20,200 acres of controlled mineral and 16 seams located in southern West Virginia; the Berwind property comprising approximately 41,300 acres of controlled mineral and an area of Squire Jim seam coal deposits, which is situated on the border of West Virginia and Virginia; the Knox Creek property consisting of approximately 62,100 acres of controlled mineral that is located in Virginia; and the RAM Mine property comprising approximately 1,570 acres of controlled mineral, which is situated in southwestern Pennsylvania. The company serves blast furnace steel mills and coke plants in the United States, as well as international metallurgical coal consumers.
Ramaco Resources Fundamentals Summary
|METC fundamental statistics|
Is METC overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|METC income statement (TTM)|
|Cost of Revenue||US$264.35m|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||2.28|
|Net Profit Margin||21.95%|
How did METC perform over the long term?See historical performance and comparison
4.9%Current Dividend Yield
Is METC undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 5/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Key Valuation Metric
Which metric is best to use when looking at relative valuation for METC?
Other financial metrics that can be useful for relative valuation.
|What is METC's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does METC's PE Ratio compare to its peers?
|METC PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
ZEUS Olympic Steel
MSB Mesabi Trust
HUDI Huadi International Group
SCHN Schnitzer Steel Industries
METC Ramaco Resources
Price-To-Earnings vs Peers: METC is good value based on its Price-To-Earnings Ratio (4.1x) compared to the peer average (35.4x).
Price to Earnings Ratio vs Industry
How does METC's PE Ratio compare vs other companies in the US Metals and Mining Industry?
Price-To-Earnings vs Industry: METC is good value based on its Price-To-Earnings Ratio (4.1x) compared to the US Metals and Mining industry average (6.4x)
Price to Earnings Ratio vs Fair Ratio
What is METC's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
|Current PE Ratio||4.1x|
|Fair PE Ratio||4.8x|
Price-To-Earnings vs Fair Ratio: METC is good value based on its Price-To-Earnings Ratio (4.1x) compared to the estimated Fair Price-To-Earnings Ratio (4.8x).
Share Price vs Fair Value
What is the Fair Price of METC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: METC ($9.27) is trading below our estimate of fair value ($24.04)
Significantly Below Fair Value: METC is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price, but analysts are not within a statistically confident range of agreement.
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How is Ramaco Resources forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?
Future Growth Score1/6
Future Growth Score 1/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: METC's earnings are forecast to decline over the next 3 years (-32% per year).
Earnings vs Market: METC's earnings are forecast to decline over the next 3 years (-32% per year).
High Growth Earnings: METC's earnings are forecast to decline over the next 3 years.
Revenue vs Market: METC's revenue (9.1% per year) is forecast to grow faster than the US market (7.7% per year).
High Growth Revenue: METC's revenue (9.1% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: Insufficient data to determine if METC's Return on Equity is forecast to be high in 3 years time
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How has Ramaco Resources performed over the past 5 years?
Past Performance Score6/6
Past Performance Score 6/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: METC has high quality earnings.
Growing Profit Margin: METC's current net profit margins (22%) are higher than last year (2.2%).
Past Earnings Growth Analysis
Earnings Trend: METC has become profitable over the past 5 years, growing earnings by 49.2% per year.
Accelerating Growth: METC's earnings growth over the past year (2100.4%) exceeds its 5-year average (49.2% per year).
Earnings vs Industry: METC earnings growth over the past year (2100.4%) exceeded the Metals and Mining industry 82.4%.
Return on Equity
High ROE: METC's Return on Equity (35.9%) is considered high.
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How is Ramaco Resources's financial position?
Financial Health Score5/6
Financial Health Score 5/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: METC's short term assets ($132.1M) exceed its short term liabilities ($110.8M).
Long Term Liabilities: METC's short term assets ($132.1M) exceed its long term liabilities ($99.2M).
Debt to Equity History and Analysis
Debt Level: METC's net debt to equity ratio (16.8%) is considered satisfactory.
Reducing Debt: Insufficient data to determine if METC's debt to equity ratio has reduced over the past 5 years.
Debt Coverage: METC's debt is well covered by operating cash flow (143.3%).
Interest Coverage: METC's interest payments on its debt are well covered by EBIT (24.7x coverage).
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What is Ramaco Resources's current dividend yield, its reliability and sustainability?
Dividend Score 4/6
Cash Flow Coverage
Current Dividend Yield
Dividend Yield vs Market
|Ramaco Resources Dividend Yield vs Market|
|Company (Ramaco Resources)||4.9%|
|Market Bottom 25% (US)||1.7%|
|Market Top 25% (US)||4.7%|
|Industry Average (Metals and Mining)||3.6%|
|Analyst forecast in 3 Years (Ramaco Resources)||5.2%|
Notable Dividend: METC's dividend (4.89%) is higher than the bottom 25% of dividend payers in the US market (1.64%).
High Dividend: METC's dividend (4.89%) is in the top 25% of dividend payers in the US market (4.61%)
Stability and Growth of Payments
Stable Dividend: Too early to tell whether METC's dividend payments have been stable as they only just started paying a dividend.
Growing Dividend: Too early to tell if METC's dividend payments are increasing as they only just started paying a dividend.
Earnings Payout to Shareholders
Earnings Coverage: With its low payout ratio (10%), METC's dividend payments are thoroughly covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: With its reasonably low cash payout ratio (35.1%), METC's dividend payments are well covered by cash flows.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Randy Atkins (69 yo)
Mr. Randall W. Atkins, also known as Randy, has been the Chief Executive Officer and Chairman of the Board at Ramaco, LLC since 2011 and is its Sole Owner. Mr. Atkins is an Owner or Controller of a number...
CEO Compensation Analysis
|Randy Atkins's Compensation vs Ramaco Resources Earnings|
|Date||Total Comp.||Salary||Company Earnings|
|Jun 30 2022||n/a||n/a|
|Mar 31 2022||n/a||n/a|
|Dec 31 2021||US$4m||US$600k|
|Sep 30 2021||n/a||n/a|
|Jun 30 2021||n/a||n/a|
|Mar 31 2021||n/a||n/a|
|Dec 31 2020||US$3m||US$540k|
|Sep 30 2020||n/a||n/a|
|Jun 30 2020||n/a||n/a|
|Mar 31 2020||n/a||n/a|
|Dec 31 2019||US$2m||US$500k|
|Sep 30 2019||n/a||n/a|
|Jun 30 2019||n/a||n/a|
|Mar 31 2019||n/a||n/a|
|Dec 31 2018||US$2m||US$425k|
|Sep 30 2018||n/a||n/a|
|Jun 30 2018||n/a||n/a|
|Mar 31 2018||n/a||n/a|
|Dec 31 2017||US$2m||US$391k|
|Sep 30 2017||n/a||n/a|
|Jun 30 2017||n/a||n/a|
|Mar 31 2017||n/a||n/a|
|Dec 31 2016||US$2m||US$300k|
|Sep 30 2016||n/a||n/a|
|Jun 30 2016||n/a||n/a|
|Mar 31 2016||n/a||n/a|
|Dec 31 2015||US$106k||US$81k|
Compensation vs Market: Randy's total compensation ($USD4.36M) is above average for companies of similar size in the US market ($USD2.83M).
Compensation vs Earnings: Randy's compensation has increased by more than 20% in the past year.
Experienced Management: METC's management team is considered experienced (3.2 years average tenure).
Experienced Board: METC's board of directors are considered experienced (3.3 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: METC insiders have only sold shares in the past 3 months.
Recent Insider Transactions
|02 Sep 22||SellUS$49,450||David Frischkorn||Individual||5,000||US$9.89|
|18 Aug 22||SellUS$58,300||David Frischkorn||Individual||5,000||US$11.66|
|09 Nov 21||SellUS$890,486||Randall Atkins||Individual||57,575||US$15.56|
|Owner Type||Number of Shares||Ownership Percentage|
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
|Ownership||Name||Shares||Current Value||Change %||Portfolio %|
Ramaco Resources, Inc.'s employee growth, exchange listings and data sources
- Name: Ramaco Resources, Inc.
- Ticker: METC
- Exchange: NasdaqGS
- Founded: 2015
- Industry: Steel
- Sector: Materials
- Implied Market Cap: US$408.693m
- Shares outstanding: 44.09m
- Website: https://www.ramacoresources.com
Number of Employees
- Ramaco Resources, Inc.
- 250 West Main Street
- Suite 1800
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|METC||NasdaqGS (Nasdaq Global Select)||Yes||Common Stock||US||USD||Feb 2017|
|5R0||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||Feb 2017|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/09/29 00:00|
|End of Day Share Price||2022/09/29 00:00|
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.