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HCC

Warrior Met Coal NYSE:HCC Stock Report

Last Price

US$30.89

Market Cap

US$1.6b

7D

8.8%

1Y

10.1%

Updated

04 Oct, 2022

Data

Company Financials +
HCC fundamental analysis
Snowflake Score
Valuation3/6
Future Growth0/6
Past Performance3/6
Financial Health5/6
Dividends0/6

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

Summary of all time highs, changes and price drops for Warrior Met Coal
Historical stock prices
Current Share PriceUS$30.89
52 Week HighUS$42.95
52 Week LowUS$20.25
Beta1.01
1 Month Change-3.11%
3 Month Change13.61%
1 Year Change10.13%
3 Year Change59.97%
5 Year Change32.63%
Change since IPO71.61%

Recent News & Updates

Sep 26
Is Warrior Met Coal (NYSE:HCC) Using Too Much Debt?

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...

Sep 01

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”

Aug 31
Returns on Capital Paint A Bright Future For Warrior Met Coal (NYSE:HCC)

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...

Shareholder Returns

HCCUS Metals and MiningUS Market
7D8.8%12.6%4.4%
1Y10.1%-6.2%-18.2%

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.

Price Volatility

Is HCC's price volatile compared to industry and market?
HCC volatility
HCC Average Weekly Movement6.4%
Metals and Mining Industry Average Movement8.9%
Market Average Movement6.9%
10% most volatile stocks in US Market15.5%
10% least volatile stocks in US Market2.8%

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

FoundedEmployeesCEOWebsite
2015704Walt Schellerhttps://warriormetcoal.com

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

How do Warrior Met Coal's earnings and revenue compare to its market cap?
HCC fundamental statistics
Market CapUS$1.60b
Earnings (TTM)US$620.16m
Revenue (TTM)US$1.62b

2.6x

P/E Ratio

1.0x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
HCC income statement (TTM)
RevenueUS$1.62b
Cost of RevenueUS$604.06m
Gross ProfitUS$1.02b
Other ExpensesUS$397.60m
EarningsUS$620.16m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)12.01
Gross Margin62.75%
Net Profit Margin38.24%
Debt/Equity Ratio26.4%

How did HCC perform over the long term?

See historical performance and comparison

Dividends

0.8%

Current Dividend Yield

2%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is HCC undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

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

  • Analyst Forecast

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.

HCC key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.8x
Enterprise Value/EBITDA1.4x
PEG Ratio-0.04x

Price to Earnings Ratio vs Peers

How does HCC's PE Ratio compare to its peers?

HCC PE Ratio vs Peers
The above table shows the PE ratio for HCC vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average3.5x
WOR Worthington Industries
7.2x-6.0%US$2.2b
RYI Ryerson Holding
2.1xn/aUS$1.1b
TMST TimkenSteel
3.6x-33.9%US$782.6m
ASTL Algoma Steel Group
1x-56.1%US$731.2m
HCC Warrior Met Coal
2.6x-57.2%US$1.6b

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.

HCC PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio2.6x
Fair PE Ratio3.2x

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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Future Growth

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

Future Growth Score

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


-57.2%

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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Past Performance

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

Past Performance Score

3/6

Past Performance Score 3/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


-23.7%

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.


Discover strong past performing companies

Financial Health

How is Warrior Met Coal's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

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).


Balance Sheet


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Dividend

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

Dividend Score

0/6

Dividend Score 0/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


0.78%

Current Dividend Yield

Dividend Yield vs Market

Warrior Met Coal Dividend Yield vs Market
How does Warrior Met Coal dividend yield compare to the market?
SegmentDividend Yield
Company (Warrior Met Coal)0.8%
Market Bottom 25% (US)1.6%
Market Top 25% (US)4.5%
Industry Average (Metals and Mining)3.3%
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.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

6.5yrs

Average management tenure


CEO

Walt Scheller (61 yo)

6.5yrs

Tenure

US$5,679,932

Compensation

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
How has Walt Scheller's remuneration changed compared to Warrior Met Coal's earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

US$620m

Mar 31 2022n/an/a

US$318m

Dec 31 2021US$6mUS$693k

US$151m

Sep 30 2021n/an/a

-US$21m

Jun 30 2021n/an/a

-US$74m

Mar 31 2021n/an/a

-US$79m

Dec 31 2020US$4mUS$715k

-US$36m

Sep 30 2020n/an/a

US$19m

Jun 30 2020n/an/a

US$78m

Mar 31 2020n/an/a

US$213m

Dec 31 2019US$4mUS$666k

US$302m

Sep 30 2019n/an/a

US$655m

Jun 30 2019n/an/a

US$663m

Mar 31 2019n/an/a

US$629m

Dec 31 2018US$3mUS$643k

US$697m

Sep 30 2018n/an/a

US$420m

Jun 30 2018n/an/a

US$487m

Mar 31 2018n/an/a

US$525m

Dec 31 2017US$4mUS$615k

US$455m

Sep 30 2017n/an/a

US$392m

Jun 30 2017n/an/a

US$239m

Mar 31 2017n/an/a

US$59m

Dec 31 2016US$2mUS$634k

-US$50m

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.


Leadership Team

Experienced Management: HCC's management team is seasoned and experienced (6.5 years average tenure).


Board Members

Experienced Board: HCC's board of directors are considered experienced (5.5 years average tenure).


Ownership

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

NYSE:HCC Recent Insider Transactions by Companies or Individuals
DateValueNameEntityRoleSharesMax Price
11 Aug 22BuyUS$48,015Lisa SchnorrIndividual1,500US$32.01
18 May 22SellUS$289,000Brian ChopinIndividual8,500US$34.00

Ownership Breakdown

What is the ownership structure of HCC?
Owner TypeNumber of SharesOwnership Percentage
Individual Insiders520,5441.0%
General Public1,660,6723.2%
Institutions49,472,31895.8%

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


Top Shareholders

Top 25 shareholders own 72.76% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
14.23%
BlackRock, Inc.
7,348,512$227.0m1.11%0.01%
13.47%
The Vanguard Group, Inc.
6,959,195$215.0m8.56%no data
4.09%
FMR LLC
2,113,324$65.3m0.62%0.01%
3.67%
State Street Global Advisors, Inc.
1,894,255$58.5m2.31%no data
3.49%
Dimensional Fund Advisors LP
1,801,858$55.7m3.64%0.01%
3.48%
Key Group Holdings (Cayman), Ltd.
1,798,372$55.6m38.79%3.73%
3.22%
Renaissance Technologies LLC
1,664,979$51.4m-21.66%0.06%
3%
Assenagon Asset Management S.A.
1,549,584$47.9m111.7%0.16%
2.7%
Third Avenue Management LLC
1,394,280$43.1m4.62%3.8%
2.18%
Waratah Capital Advisors Ltd.
1,124,658$34.7m1.15%1.72%
1.87%
Balyasny Asset Management L.P.
965,322$29.8m0%0.13%
1.73%
Geode Capital Management, LLC
893,605$27.6m0.5%no data
1.65%
Deutsche Asset & Wealth Management
851,455$26.3m-25.04%0.01%
1.63%
Millennium Management LLC
840,087$26.0m3.39%0.03%
1.58%
Goldman Sachs Asset Management, L.P.
813,789$25.1m14.14%0.01%
1.25%
Two Sigma Advisers, LP
645,800$19.9m-6.57%0.05%
1.23%
Northern Trust Global Investments
637,491$19.7m-0.67%no data
1.17%
Morgan Stanley, Investment Banking and Brokerage Investments
606,299$18.7m-21.27%no data
1.16%
BNY Mellon Asset Management
601,107$18.6m-2.53%no data
1.12%
Citadel Advisors LLC
576,150$17.8m-16.63%0.03%
1.08%
D. E. Shaw & Co., L.P.
559,285$17.3m-21.1%0.03%
1.04%
American Century Investment Management Inc
536,385$16.6m50.54%0.01%
1.04%
L1 Capital Pty. Limited
535,568$16.5m0%0.9%
0.97%
Charles Schwab Investment Management, Inc.
501,547$15.5m-5.88%no data
0.71%
Pacific Investment Management Company LLC
369,260$11.4m17.14%0.05%

Company Information

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


Key Information

  • 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


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
HCC *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNApr 2017

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/10/04 00:00
End of Day Share Price2022/10/04 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


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.