NYSE:HCC

Stock Analysis Report

Executive Summary

Warrior Met Coal, Inc. produces and exports metallurgical coal for the steel industry.

Rewards

Trading at 44.7% below its fair value

Earnings grew by 56.1% over the past year

Risk Analysis

Earnings are forecast to decline by an average of -27.5% per year for the next 3 years

Has a high level of debt



Snowflake Analysis

Undervalued with solid track record.


Similar Companies

Share Price & News

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


Latest Share Price and Events

Stable Share Price: HCC has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-7.8%

HCC

-2.6%

US Metals and Mining

0.6%

US Market


1 Year Return

-17.2%

HCC

11.8%

US Metals and Mining

24.6%

US Market

Return vs Industry: HCC underperformed the US Metals and Mining industry which returned 17.5% over the past year.

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


Shareholder returns

HCCIndustryMarket
7 Day-7.8%-2.6%0.6%
30 Day5.0%-2.8%3.0%
90 Day-2.9%7.5%10.6%
1 Year-3.6%-17.2%15.1%11.8%27.3%24.6%
3 Yearn/a0.8%-4.5%50.5%40.8%
5 Yearn/a35.9%25.3%78.9%59.1%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

48.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HCC ($22.76) is trading below our estimate of fair value ($41.15)

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


Price To Earnings Ratio

PE vs Industry: HCC is good value based on its PE Ratio (1.8x) compared to the Metals and Mining industry average (11.4x).

PE vs Market: HCC is good value based on its PE Ratio (1.8x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

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


Price to Book Ratio

PB vs Industry: HCC is good value based on its PB Ratio (1.6x) compared to the US Metals and Mining industry average (1.6x).


Next Steps

Future Growth

How is Warrior Met Coal forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?

-27.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HCC's earnings are forecast to decline over the next 3 years (-27.5% per year).

Earnings vs Market: HCC's earnings are forecast to decline over the next 3 years (-27.5% per year).

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

Revenue vs Market: HCC's revenue is expected to decline over the next 3 years (-7.4% per year).

High Growth Revenue: HCC's revenue is forecast to decline over the next 3 years (-7.4% per year).


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HCC's Return on Equity is forecast to be low in 3 years time (17.9%).


Next Steps

Past Performance

How has Warrior Met Coal performed over the past 5 years?

68.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HCC has high quality earnings.

Growing Profit Margin: HCC's current net profit margins (46%) are higher than last year (33.5%).


Past Earnings Growth Analysis

Earnings Trend: HCC's earnings have grown significantly by 68.7% per year over the past 5 years.

Accelerating Growth: HCC's earnings growth over the past year (56.1%) is below its 5-year average (68.7% per year).

Earnings vs Industry: HCC earnings growth over the past year (56.1%) exceeded the Metals and Mining industry -7.6%.


Return on Equity

High ROE: HCC's Return on Equity (87.8%) is considered outstanding.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Warrior Met Coal's financial position?


Financial Position Analysis

Short Term Liabilities: HCC's short term assets ($462.9M) exceed its short term liabilities ($150.2M).

Long Term Liabilities: HCC's short term assets ($462.9M) exceed its long term liabilities ($453.5M).


Debt to Equity History and Analysis

Debt Level: HCC's debt to equity ratio (45.4%) is considered high.

Reducing Debt: Insufficient data to determine if HCC's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: HCC's debt is well covered by operating cash flow (188.5%).

Interest Coverage: HCC's interest payments on its debt are well covered by EBIT (16.4x coverage).


Balance Sheet

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

Debt Coverage by Assets: HCC's debt is covered by short term assets (assets are 1.4x debt).


Next Steps

Dividend

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

0.92%

Current Dividend Yield


Dividend Yield vs Market

company0.9%marketbottom25%1.4%markettop25%3.7%industryaverage2.5%forecastin3Years14.7%

Current dividend yield vs market & industry

Notable Dividend: HCC's dividend (0.88%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: HCC's dividend (0.88%) is low compared to 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, HCC has been paying a dividend for less than 10 years.

Growing Dividend: HCC has only been paying a dividend for 3 years, and since then payments have not increased.


Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (1.6%), HCC's dividend payments are thoroughly covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HCC's dividends in 3 years are forecast to be covered by earnings (64.3% payout ratio).


Next Steps

Management

What is the CEO of Warrior Met Coal's salary, the management and board of directors tenure and is there insider trading?

3.8yrs

Average management tenure


CEO

Walt Scheller (58yo)

3.8yrs

Tenure

US$3,242,547

Compensation

Mr. Walter J. Scheller III, also known as Walt, has been Chief Executive Officer at Warrior Met Coal, LLC since March 31, 2016. Mr. Scheller served as the Chief Executive Officer at Walter Energy, Inc. fro ...


CEO Compensation Analysis

Compensation vs Market: Walt's total compensation ($USD3.24M) is about average for companies of similar size in the US market ($USD2.53M).

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


Management Age and Tenure

3.8yrs

Average Tenure

48yo

Average Age

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


Board Age and Tenure

3.3yrs

Average Tenure

56.5yo

Average Age

Experienced Board: HCC's board of directors are considered experienced (3.3 years average tenure).


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$26,66419 Aug 19
Dale Boyles
EntityIndividual
Role
Chief Financial Officer
Chief Financial Officer
Shares1,200
Max PriceUS$22.22
SellUS$228,32723 May 19
Brian Chopin
EntityIndividual
Role
Chief Accounting Officer
Chief Accounting Officer & Controller
Shares8,329
Max PriceUS$27.44
SellUS$958,80010 May 19
Stephen Williams
EntityIndividual
Role
Chairman of the Board
Chairman of the Board
Shares34,000
Max PriceUS$28.20

Ownership Breakdown

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


Management Team

  • Walt Scheller (58yo)

    CEO & Director

    • Tenure: 3.8yrs
    • Compensation: US$3.24m
  • Dale Boyles (58yo)

    Chief Financial Officer

    • Tenure: 3yrs
    • Compensation: US$1.42m
  • Jack Richardson (57yo)

    Chief Operating Officer

    • Tenure: 3.8yrs
    • Compensation: US$1.79m
  • Brian Chopin (36yo)

    Chief Accounting Officer & Controller

    • Tenure: 3.8yrs
  • Kelli Gant (47yo)

    Chief Administrative Officer & Secretary

    • Tenure: 3.8yrs
    • Compensation: US$1.09m
  • Phillip Monroe (48yo)

    Vice President of Legal

    • Tenure: 1.8yrs
    • Compensation: US$851.32k
  • Charles Lussier (44yo)

    Senior Vice President of Sales & Marketing

    • Tenure: 1.8yrs

Board Members

  • J. Harvey (68yo)

    Lead Independent Director

    • Tenure: 1.9yrs
    • Compensation: US$144.99k
  • Alan Schumacher (72yo)

    Independent Director

    • Tenure: 2.8yrs
    • Compensation: US$144.99k
  • Gareth Turner (55yo)

    Independent Director

    • Tenure: 3.8yrs
  • Walt Scheller (58yo)

    CEO & Director

    • Tenure: 3.8yrs
    • Compensation: US$3.24m
  • Doug Williams (55yo)

    Chairman of the Board

    • Tenure: 3.8yrs
    • Compensation: US$746.39k
  • Ana Amicarella (52yo)

    Independent Director

    • Tenure: 1.4yrs

Company Information

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


Key Information

  • Name: Warrior Met Coal, Inc.
  • Ticker: HCC
  • Exchange: NYSE
  • Founded: 2015
  • Industry: Steel
  • Sector: Materials
  • Market Cap: US$1.105b
  • Shares outstanding: 51.07m
  • Website: https://warriormetcoal.com

Number of Employees


Location

  • Warrior Met Coal, Inc.
  • 16243 Highway 216
  • Brookwood
  • Alabama
  • 35444
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HCCNYSE (New York Stock Exchange)YesCommon StockUSUSDApr 2017
WJ4DB (Deutsche Boerse AG)YesCommon StockDEEURApr 2017

Biography

Warrior Met Coal, Inc. produces and exports metallurgical coal for the steel industry. It operates two underground mines located in Alabama. The company sells its metallurgical coal to a customer base of blast furnace steel producers located primarily in Europe, South America, and Asia. It also sells natural gas, which is extracted as a byproduct from coal production. Warrior Met Coal, Inc. was founded in 2015 and is headquartered in Brookwood, Alabama. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/01/23 01:07
End of Day Share Price2020/01/22 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.