Is NRP a good stock to buy? We came across a bullish thesis on Natural Resource Partners L.P. on The Coal Trader’s Substack. In this article, we will summarize the bulls’ thesis on NRP. Natural Resource Partners L.P.’s share was trading at $115.35 as of April 20th. NRP’s trailing P/E was 11.49 according to Yahoo Finance.
A mining operation. Photo by Tom Fisk on Pexels
Natural Resource Partners L.P., together with its subsidiaries, owns, manages, and leases a portfolio of mineral properties in the United States. NRP has recently attracted incremental investment as part of a broader strategy to balance heavy exposure to technology and the S&P 500, with the company viewed as a steady compounder tied to the real economy.
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Since being rated a Buy in May 2025, NRP’s units—then trading in the mid-$90s—have trended upward, delivering returns broadly in line with the broader market, with a notable acceleration in 2026. This performance has been supported by improving metallurgical coal pricing and growing recognition that NRP is approaching a near debt-free position, a key inflection point for valuation.
NRP’s royalty-based business model, heavily tied to metallurgical coal through major operators such as Alpha Metallurgical Resources and Ramaco Resources, positions it to benefit directly from commodity price strength. With minimal capital expenditure requirements, rising coal prices translate efficiently into free cash flow (FCF), reinforcing its financial flexibility. By early 2026, the company is expected to reduce its ~$70 million debt balance materially, potentially reaching a near net-zero debt position while maintaining a conservative cash buffer.
Management’s capital allocation framework prioritizes returning cash to unitholders through distributions and buybacks before pursuing growth, setting the stage for rising yields. A potential special distribution in March, consistent with prior years, could lift trailing payouts meaningfully. Looking ahead, NRP could generate approximately $200 million in FCF in 2026, enabling distributions of $130–150 million, implying an 8–9% yield at current prices.
As the market gains confidence in the durability of these cash flows, yield compression toward midstream-like levels could drive a rerating, with unit prices potentially rising into the $150–$180 range, offering an attractive risk-reward profile supported by strong cash generation and balance sheet strength.
Previously, we covered a bullish thesis on Natural Resource Partners L.P. (NRP) by InvestSpecial in April 2025, which highlighted the company’s royalty-based model, deleveraging toward a debt-free balance sheet, and potential rerating driven by stable free cash flow and dividends. NRP’s stock price has appreciated by approximately 14.97% since our coverage. The Coal Trader shares a similar view but emphasizes on rising metallurgical coal prices and accelerating distributions.
Natural Resource Partners L.P. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 9 hedge fund portfolios held NRP at the end of the fourth quarter which was 6 in the previous quarter. While we acknowledge the risk and potential of NRP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than NRP and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
