HCC Stock Overview
Warrior Met Coal, Inc. produces and exports non-thermal metallurgical coal for the steel industry.
Warrior Met Coal Competitors
Price History & Performance
|Historical stock prices|
|Current Share Price||US$30.89|
|52 Week High||US$42.95|
|52 Week Low||US$20.25|
|1 Month Change||-3.11%|
|3 Month Change||13.61%|
|1 Year Change||10.13%|
|3 Year Change||59.97%|
|5 Year Change||32.63%|
|Change since IPO||71.61%|
Recent News & Updates
Is Warrior Met Coal (NYSE:HCC) Using Too Much Debt?
Some say volatility, rather than debt, is the best way to think about risk as an investor, but Warren Buffett famously...
Warrior Met Coal: King-Sized Dividends Coming From King Coal
Summary After seeing a recovery in 2021, Warrior Met Coal reinstated their special dividends during 2022. This was not surprising given their net cash position from the massive cash windfall provided by the recent booming metallurgical coal prices. When looking ahead, their special dividends appear poised to surge higher as their existing cash balance is virtually equal to the total cost of their flagship Blue Creek project. Since funding is already secured, it leaves no other uses for their free cash flow aside from shareholder returns. Even with far softer operating conditions, they could still provide a very high 10%+ dividend yield on current cost, and thus I believe that upgrading to a buy rating is appropriate. Introduction After operating conditions recovered during 2021 for Warrior Met Coal (HCC), upon entering 2022 there were prospects for shareholders to effectively buy now and receive a 10% to 20% refund once their special dividends returned, as my previous article highlighted. Thankfully these soon returned and if continued at their most recent quarterly rate, would provide a very high dividend yield of slightly over 10%. This is already very exciting for shareholders but when looking ahead, it sees king-sized dividends coming from king coal thanks to their massive cash windfall thus far into 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 dividend coverage through earnings per share 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 Following their cash flow performance recovery during 2021, the booming operating conditions during the first half of 2022 provided a massive cash windfall that few investors expected when the year began. These resulted in metallurgical coal prices reaching new records with their average net selling price hitting $377 per ton and thus well ahead of the $180 per ton across 2021. This saw their operating cash flow soar to a massive $399.7m, which unsurprisingly was several magnitudes higher year-on-year and most impressively, even managed to surpass their full-year result of $351.5m during 2021, despite literally being only half the length of time. Even though they ramped up their capital expenditure almost three-fold year-on-year to $99.8m during the first half of 2022 as they pushed ahead with their flagship Blue Creek project, they still produced an extremely impressive free cash flow of $285.8m. Despite giving rise to the return of their special dividends and their resulting very high 10%+ yield, their latest quarterly dividend of $0.06 per share and accompanying special dividend of $0.80 per share attributable to the second quarter only cost a combined $44.4m given their latest outstanding share count of 51,653,534. This is obviously a mere fraction of their potential given their free cash flow, in fact, even with the far softer results of 2021, $44.4m is still affordable since it annualizes to $177.6m and their free cash flow was much higher at $239.8m. Unlike in previous years, they now sport a net cash position and given recent commentary from management, it seems that their special dividends are poised to surge higher. Author After seeing their cash balance swell past their total debt levels during 2021, the booming operating conditions during the first half of 2022 saw their net cash position continue soaring to reach an extremely impressive $313m and thus far higher than the $64.5m where it ended 2021. Quite obviously, this once again makes assessing their leverage in detail pointless because they clearly have zero leverage and thus no handbrakes placed upon their special dividends, which could be poised to surge higher as soon as next quarter thanks to their massive cash windfall, as per the commentary from management included below. “Now that we have nearly enough cash to prefund the entire Blue Creek project, we are pleased to be able to continue to balance capital investments for medium to long-term growth with near-term returns to our stockholders without incurring any debt.” -Warrior Met Coal Q2 2022 Conference Call. Once they reach this point, they will have no reasons to continue retaining most of their operating cash flow as the funding for their largest project is already secured, thereby allowing for shareholder returns to safely exceed their free cash flow. There should be no reason that this point is not reached during the third quarter of 2022 since they ended the second quarter with a cash balance of $653.4m and thus already within range for the total estimated capital expenditure for the Blue Creek project of $650m to $700m, as per slide eleven of their second quarter of 2022 results presentation. Whether they opt for this approach will only be known during the coming quarters as their next dividends are declared, although their capital allocation strategy only calls for a minimum $150m cash balance, as per the commentary from management included below. “As previously disclosed, there are certain key metrics that we're continuing to focus on achieving as we make those capital allocation decisions during the 5-year development at Blue Creek. They include: first, maintaining a higher amount of minimum total liquidity of $250 million, including a minimum cash balance of $150 million at all times during the development of Blue Creek”
Returns on Capital Paint A Bright Future For Warrior Met Coal (NYSE:HCC)
If you're not sure where to start when looking for the next multi-bagger, there are a few key trends you should keep an...
|HCC||US Metals and Mining||US Market|
Return vs Industry: HCC exceeded the US Metals and Mining industry which returned -9.6% over the past year.
Return vs Market: HCC exceeded the US Market which returned -20% over the past year.
|HCC Average Weekly Movement||6.4%|
|Metals and Mining Industry Average Movement||8.4%|
|Market Average Movement||6.8%|
|10% most volatile stocks in US Market||15.5%|
|10% least volatile stocks in US Market||2.8%|
Stable Share Price: HCC is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 6% a week.
Volatility Over Time: HCC's weekly volatility (6%) has been stable over the past year.
About the Company
Warrior Met Coal, Inc. produces and exports non-thermal 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.
Warrior Met Coal Fundamentals Summary
|HCC fundamental statistics|
Is HCC overvalued?See Fair Value and valuation analysis
Earnings & Revenue
|HCC income statement (TTM)|
|Cost of Revenue||US$604.06m|
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
|Earnings per share (EPS)||12.01|
|Net Profit Margin||38.24%|
How did HCC perform over the long term?See historical performance and comparison
0.8%Current Dividend Yield
Is HCC undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score 3/6
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 HCC?
Other financial metrics that can be useful for relative valuation.
|What is HCC's n/a Ratio?|
Price to Earnings Ratio vs Peers
How does HCC's PE Ratio compare to its peers?
|HCC PE Ratio vs Peers|
|Company||PE||Estimated Growth||Market Cap|
WOR Worthington Industries
RYI Ryerson Holding
ASTL Algoma Steel Group
HCC Warrior Met Coal
Price-To-Earnings vs Peers: HCC is good value based on its Price-To-Earnings Ratio (2.6x) compared to the peer average (3.5x).
Price to Earnings Ratio vs Industry
How does HCC's PE Ratio compare vs other companies in the US Metals and Mining Industry?
Price-To-Earnings vs Industry: HCC is good value based on its Price-To-Earnings Ratio (2.6x) compared to the US Metals and Mining industry average (6.7x)
Price to Earnings Ratio vs Fair Ratio
What is HCC'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||2.6x|
|Fair PE Ratio||3.2x|
Price-To-Earnings vs Fair Ratio: HCC is good value based on its Price-To-Earnings Ratio (2.6x) compared to the estimated Fair Price-To-Earnings Ratio (3.2x).
Share Price vs Fair Value
What is the Fair Price of HCC when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: HCC ($30.89) is trading above our estimate of fair value ($11.79)
Significantly Below Fair Value: HCC is trading above our estimate of fair value.
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 Warrior Met Coal forecast to perform in the next 1 to 3 years based on estimates from 4 analysts?
Future Growth Score0/6
Future Growth Score 0/6
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: HCC's earnings are forecast to decline over the next 3 years (-57.2% per year).
Earnings vs Market: HCC's earnings are forecast to decline over the next 3 years (-57.2% 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 (-18.1% per year).
High Growth Revenue: HCC's revenue is forecast to decline over the next 3 years (-18.1% 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 (14%).
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How has Warrior Met Coal performed over the past 5 years?
Past Performance Score3/6
Past Performance Score 3/6
Growing Profit Margin
Earnings vs Industry
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: HCC has high quality earnings.
Growing Profit Margin: HCC became profitable in the past.
Past Earnings Growth Analysis
Earnings Trend: HCC's earnings have declined by 23.7% per year over the past 5 years.
Accelerating Growth: HCC has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.
Earnings vs Industry: HCC has become profitable in the last year, making it difficult to compare its past year earnings growth to the Metals and Mining industry (82.4%).
Return on Equity
High ROE: HCC's Return on Equity (48%) is considered outstanding.
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How is Warrior Met Coal's financial position?
Financial Health Score5/6
Financial Health Score 5/6
Short Term Liabilities
Long Term Liabilities
Financial Position Analysis
Short Term Liabilities: HCC's short term assets ($1.1B) exceed its short term liabilities ($144.5M).
Long Term Liabilities: HCC's short term assets ($1.1B) exceed its long term liabilities ($463.4M).
Debt to Equity History and Analysis
Debt Level: HCC has more cash than its total debt.
Reducing Debt: HCC's debt to equity ratio has increased from 0.6% to 26.4% over the past 5 years.
Debt Coverage: HCC's debt is well covered by operating cash flow (187.3%).
Interest Coverage: HCC's interest payments on its debt are well covered by EBIT (24.7x coverage).
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What is Warrior Met Coal current dividend yield, its reliability and sustainability?
Dividend Score 0/6
Cash Flow Coverage
Current Dividend Yield
Dividend Yield vs Market
|Warrior Met Coal Dividend Yield vs Market|
|Company (Warrior Met Coal)||0.8%|
|Market Bottom 25% (US)||1.6%|
|Market Top 25% (US)||4.6%|
|Industry Average (Metals and Mining)||3.4%|
|Analyst forecast in 3 Years (Warrior Met Coal)||2.1%|
Notable Dividend: HCC's dividend (0.78%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.64%).
High Dividend: HCC's dividend (0.78%) is low compared to the top 25% of dividend payers in the US market (4.63%).
Stability and Growth of Payments
Stable Dividend: HCC is not paying a notable dividend for the US market, therefore no need to check if payments are stable.
Growing Dividend: HCC is not paying a notable dividend for the US market, therefore no need to check if payments are increasing.
Earnings Payout to Shareholders
Earnings Coverage: HCC is not paying a notable dividend for the US market.
Cash Payout to Shareholders
Cash Flow Coverage: HCC is not paying a notable dividend for the US market.
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How experienced are the management team and are they aligned to shareholders interests?
Average management tenure
Walt Scheller (61 yo)
Mr. Walter J. Scheller III, also known as Walt, has been Chief Executive Officer at Warrior Met Coal, Inc. since March 31, 2016. Mr. Scheller served as the Chief Executive Officer at Walter Energy, Inc. fr...
CEO Compensation Analysis
|Walt Scheller's Compensation vs Warrior Met Coal 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$6m||US$693k|
|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$4m||US$715k|
|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$4m||US$666k|
|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$3m||US$643k|
|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$4m||US$615k|
|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$634k|
Compensation vs Market: Walt's total compensation ($USD5.68M) is about average for companies of similar size in the US market ($USD5.50M).
Compensation vs Earnings: Walt's compensation has been consistent with company performance over the past year.
Experienced Management: HCC's management team is seasoned and experienced (6.5 years average tenure).
Experienced Board: HCC's board of directors are considered experienced (5.5 years average tenure).
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: HCC insiders have bought more shares than they have sold in the past 3 months.
Recent Insider Transactions
|11 Aug 22||BuyUS$48,015||Lisa Schnorr||Individual||1,500||US$32.01|
|18 May 22||SellUS$289,000||Brian Chopin||Individual||8,500||US$34.00|
|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 %|
Warrior Met Coal, Inc.'s employee growth, exchange listings and data sources
- Name: Warrior Met Coal, Inc.
- Ticker: HCC
- Exchange: NYSE
- Founded: 2015
- Industry: Steel
- Sector: Materials
- Implied Market Cap: US$1.596b
- Shares outstanding: 51.65m
- Website: https://warriormetcoal.com
Number of Employees
- Warrior Met Coal, Inc.
- 16243 Highway 216
- United States
|Ticker||Exchange||Primary Security||Security Type||Country||Currency||Listed on|
|HCC||NYSE (New York Stock Exchange)||Yes||Common Stock||US||USD||Apr 2017|
|WJ4||DB (Deutsche Boerse AG)||Yes||Common Stock||DE||EUR||Apr 2017|
|HCC *||BMV (Bolsa Mexicana de Valores)||Yes||Common Stock||MX||MXN||Apr 2017|
Company Analysis and Financial Data Status
|Data||Last Updated (UTC time)|
|Company Analysis||2022/10/04 00:00|
|End of Day Share Price||2022/10/04 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.