Peabody Energy Corp (NYSE: BTU)

Sector: Energy Industry: Thermal Coal CIK: 0001064728
Market Cap 4.41 Bn
P/B 1.25
P/E -135.00
P/S 1.11
ROIC (Qtr) -1.81
Div Yield % 0.23
Rev 1y % (Qtr) -6.98
Total Debt (Qtr) 407.60 Mn
Debt/Equity (Qtr) 0.12
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About

Investment thesis

Bull case

  • Strong operating cash flow of 384.90M provides robust 0.94x coverage of total debt 407.60M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 603.30M provide 38.92x coverage of short-term debt 15.50M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 384.90M provides exceptional 24.67x coverage of minority interest expenses 15.60M, showing strong core operations.
  • Operating cash flow of 384.90M provides strong 36.66x coverage of stock compensation 10.50M, indicating sustainable incentive practices.
  • Strong tangible asset base of 5.74B provides 14.09x coverage of total debt 407.60M, indicating robust asset backing and low credit risk.

Bear case

  • Operating cash flow of 384.90M barely covers its investment activities of (461.30M), with a coverage ratio of -0.83, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 384.90M provides thin coverage of dividend payments of (36.60M) with a -10.52 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 603.30M provide limited coverage of acquisition spending of (19.70M), which is -30.62x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of (31.50M) provides weak coverage of capital expenditures of 416.40M, with a -0.08 ratio suggesting additional external financing needs for growth initiatives.
  • Operating earnings of 34.10M show weak coverage of depreciation charges of 381.10M, with a 0.09 ratio indicating high capital intensity and potential reinvestment needs.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Thermal Coal
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 CNR Core Natural Resources, Inc. 4.45 Bn -29.06 1.07 452.49 Mn
2 BTU Peabody Energy Corp 4.41 Bn -135.00 1.11 407.60 Mn
3 ARLP Alliance Resource Partners Lp 1.90 Bn 9.21 1.27 471.55 Mn
4 NRP Natural Resource Partners Lp 0.88 Bn 9.00 3.21 69.38 Mn
5 HNRG Hallador Energy Co 0.74 Bn -4.24 1.60 53.23 Mn
6 NC Nacco Industries Inc 0.42 Bn 8.07 2.07 87.85 Mn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.74 1.12
EV to Cash from Ops. EV/CFO 10.97 8.19
EV to Debt EV to Debt 10.36 10.87
EV to EBIT EV/EBIT 123.83 19.66
EV to EBITDA EV/EBITDA 13.82 5.56
EV to Free Cash Flow [EV/FCF] EV/FCF -134.05 13.40
EV to Market Cap EV to Market Cap 0.96 1.13
EV to Revenue EV/Rev 1.07 2.11
Price to Book Value [P/B] P/B 1.25 2.36
Price to Earnings [P/E] P/E -135.00 -23.67
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) -0.89 0.09
Dividend Payout Ratio % Div Payout % (Qtr) -127.10 10.83
Dividend per Basic Share Div per Share (Qtr) 0.31 1.41
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) -117.76 31.65
Interest Coverage Int. cover (Qtr) 0.77 2.12
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 1.70 0.67
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -21.94 30.70
Dividend Growth (1y) % Div 1y % (Qtr) 35.56 -1.04
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -81.03 -223.40
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -68.80 53.05
EBIT Growth (1y) % EBIT 1y % (Qtr) -95.37 -202.48
EBT Growth (1y) % EBT 1y % (Qtr) -101.50 -123.41
EPS Growth (1y) % EPS 1y % (Qtr) -105.73 -114.77
FCF Growth (1y) % FCF 1y % (Qtr) -109.12 18.87
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -45.77 -1.88
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.69 0.67
Cash Payout Ratio Cash Payout (Qtr) 0.05 0.13
Cash Ratio Cash Ratio (Qtr) 0.76 0.61
Current Ratio Curr Ratio (Qtr) 1.99 1.89
Debt to Equity Ratio Debt/Equity (Qtr) 0.12 0.20
Interest Cover Ratio Int Coverage (Qtr) 0.77 2.12
Times Interest Earned Times Interest Earned (Qtr) 0.77 2.12
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 10.50 19.53
EBIT Margin % EBIT Margin % (Qtr) 0.86 8.90
EBT Margin % EBT Margin % (Qtr) -0.26 6.55
Gross Margin % Gross Margin % (Qtr) 13.90 31.52
Net Profit Margin % Net Margin % (Qtr) -0.80 7.43