Peabody Energy Corporation (BTU), Alpha Natural Resources, Inc. (ANR): Great Time to Buy Bargain Coal Stocks

Second largest producer in U.S.

Arch Coal Inc (NYSE:ACI) is the second largest coal producer in the Unites States with 32 active mines in the Powder River Basin, Central Appalachia, and the Western Bituminous region.  It sold 140 million tons of coal in 2012, which generated $4.2 billion in revenue.  It has massive reserves of over 5.5 billion tons.  The company has a rock bottom price-to-sales of only 0.2  and price-to-book of only 0.3.  With $4.21 cash per share, Arch Coal is also a candidate to be taken over. It is an excellent way to play a rebound in coal prices and you will even receive a nice dividend of over 3% while you wait for coal prices to recover.

Foolish Bottom Line

Despite having to overcome some environmental obstacles, coal consumption is on the rise. Coal stocks are at the beginning of a long term bull market as demand outstrips supply. Prices are still in the bargain basement, so if you can tolerate the volatility, now is a great time for patient investors to buy.

John Dowdee has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Great Time to Buy 3 Bargain Coal Stocks originally appeared on Fool.com.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.