Natural Resource Partners LP based in Houston, Texas (PNR) is a leading natural resources company that owns, manages and leases a portfolio of mineral properties in the United States. The Company operates through two segments: mining rights; and soda ash. NRP has interests in coal, trona, soda ash and other natural resources. Its market cap is $555.27 million.
NRP reported impressive financial results in the first quarter of 2022. “Strong demand for metallurgical coal, thermal coal and soda ash continues to drive strong financial performance across our businesses,” said Craig Nunez, President and Chief Operating Officer of NRP.
PNR generated $52 million of free cash flow in the quarter and $152 million in the current year, representing increases of 120% and 85% over comparable prior periods, respectively. The Company’s liquidity was $235.60 million as of March 31, 2022, consisting of $135.60 million in cash and $100 million of available borrowing capacity under its revolving credit facility. .
Additionally, on February 2, 2022, NRP and Denbury Carbon Solutions, LLC, a wholly owned company of Denbury Inc (LAIR) subsidiary, has entered into a CO2 sequestration agreement to evaluate and possibly develop a permanent CO2 solution2 Sequestration site located on the Gulf Coast of Alabama.
Craig Nunez said: “We are very pleased to partner with Denbury on this world-class carbon sequestration project, which has the potential to provide significant environmental benefits and add significant value to NRP.
Shares of NRP have gained 32.3% in price year-to-date and 105.4% over the past year to close the last trading session at $44.40. The stock is currently trading just 12.6% below its 52-week high of $50.82, which it reached on May 5, 2022.
Here is what could influence NRP’s performance in the coming months:
NRP’s revenue and other income increased 141.5% year-over-year to $89.72 million in the first quarter of Fiscal 2022 ended March 31, 2022. The company’s operating revenue was $73.29 million, up 299.3% year-over-year. Its cash inflow from operating activities increased 125.6% year-over-year to $52.33 million.
Additionally, the company’s net profit and net earnings per share were $63.90 million and $3.11, registering increases of 662.4% and 6,120%, respectively, over the previous year. period of the previous year.
NRP’s trailing 12-month gross profit margin of 87.36% is 119.7% higher than the industry average of 39.77%. His last 12 months EBITDA margin of 79.79% is 247.5% higher than the industry average of 22.96%. Similarly, the stock’s trailing 12-month net income margin of 69.13% is 917% higher than the industry average of 6.80%.
Additionally, NRP’s leveraged FCF margin of 39.67% is 447% higher than the industry average of 7.25%. Its trailing 12-month ROCE and ROTA of 51.66% and 16.81% are above industry averages of 11.25% and 3.78%, respectively.
In terms of EV/EBITDA over the last 12 months, the NRP of 5.38x is 40.8% lower than the industry average of 9.08x. The stock’s trailing 12-month EV/EBIT of 5.99x is 56.5% below the industry average of 13.75x. Additionally, its 12-month price-to-cash flow multiple of 3.66 compares to the industry average of 6.09.
POWR ratings are promising
NRP has an overall A rating, which equates to a Strong Buy in our POWR Rankings system. POWR ratings are calculated by considering 118 separate factors, with each factor weighted to an optimal degree.
NRP has a B rating for quality, which is consistent with its industry-leading profitability. Additionally, the stock has a B rating for Momentum, which is warranted as NRP is currently trading above its 50-day and 200-day moving averages of $42.24 and $38.64, respectively.
NRP is ranked #2 out of 12 stocks in Rank A MLP – Other industry.
Beyond what I said above, we also assigned NRP ratings for Sentiment, Growth, Value, and Stability. Access all NRP ratings here.
NRP achieved strong revenue and net income growth in its latest quarter. Moreover, the company is well positioned to take advantage of its booming business. It expects demand and prices for metallurgical coal, thermal coal and soda ash to remain strong, driving its growth and profitability.
Given the company’s financial strength, high liquidity, low valuation, high profitability and ability to generate positive cash flow, we believe it might make sense to invest in the action now.
How Natural Resource Partners LP (NRP) Works Up to his peers?
NRP has an overall POWR rating of A. One might also check out these other stocks within MLPs – Other Industry with an A (Strong Buy) rating: Blueknight Energy Partners GP LLC (BKEP), Alliance Resource Partners LP (ARLP) and Westlake Chemical Partners LP (WLK).
NRP shares remained unchanged in after-hours trading on Wednesday. Year-to-date, the NRP has gained 38.21%, compared to a -12.09% rise in the benchmark S&P 500 over the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using its fundamental approach to stock analysis, Mangeet seeks to help retail investors understand the underlying factors before making investment decisions. After…