Highlights

  • Alliance Resource shows 26.58% one-year basic EPS growth, P/E of 10.91 and PEG of -1.17.
  • Third quarter net income attributable to ARLP was $139.6 million, against $95.1 million.
  • AllDale III & IV acquisition closed July 1, 2026, for approximately $206.2 million.
  • The general partner's board approved a $0.60 per unit distribution; the coverage ratio was 1.76x.

An undervalued growth stock pairs earnings growth with its P/E and PEG ratios, and Alliance Resource Partners (NASDAQ:ARLP) shows all three: basic earnings per unit grew 26.58% over one year, the trailing twelve-month P/E ratio is 10.91 and the PEG ratio, on an expected basis, is -1.17, with units trading at USD 26.50 on October 28, 2026, down 0.66%. Alongside those figures, the diversified natural resource company completed the AllDale III & IV acquisition on July 1, reported third quarter 2026 net income attributable to ARLP of $139.6 million on October 26, and updated its full year 2026 guidance the same day.

Based in Tulsa, Oklahoma, and organized in Delaware, Alliance Resource Partners describes itself as a diversified natural resource company and the second largest coal producer in the eastern United States, supplying utilities, metallurgical users and industrial users at home and abroad. It reports Coal Operations, split between the Illinois Basin and Appalachia, and Royalties, which covers Oil & Gas Royalties and Coal Royalties.

Growth: Third Quarter Earnings, Coal Volumes and Royalty Revenues

Net income attributable to ARLP was $139.6 million in the third quarter against $95.1 million a year earlier, and $228.3 million for the nine months against $228.5 million. Earnings per basic and diluted unit were $1.08 against $0.73 for the quarter, and $1.76 against $1.76 for the nine months. The partnership said the quarterly increase came primarily from higher total revenues and equity method investment income, lower operating expenses, a $16.5 million increase in the fair value of digital assets and a $6.3 million remeasurement gain on AllDale III, partly offset by higher income tax expense and a $7.3 million loss on derivative instruments.

Total revenues were $603.0 million, up 5.5% from $571.4 million. Adjusted EBITDA attributable to ARLP, a non-GAAP measure, was $233.9 million against $185.2 million, up 26.3%.

Coal Operations sold 9.348 million tons against 8.703 million at $53.93 per ton against $58.78,, and Segment Adjusted EBITDA Expense per ton was $35.64 against $40.99. Coal Operations Segment Adjusted EBITDA was $186.8 million against $157.5 million, which the company linked to resumed longwall production at Hamilton. Total royalty revenues were $87.5 million against $57.4 million, and Oil & Gas Royalties Segment Adjusted EBITDA attributable to ARLP was $43.6 million against $27.0 million.

Valuation: P/E of 10.91, PEG of -1.17 and Cash Flow Measures

The P/E ratio of 10.91 is measured on trailing twelve-month earnings, and the PEG ratio of -1.17 on an expected basis. Free cash flow, a non-GAAP measure, was $198,622 thousand in the third quarter against $151,438 thousand. Distributable Cash Flow, also non-GAAP, was $136.8 million.

Total ARLP Partners' Capital was $1,850,923 thousand at September 30, 2026, against $1,842,601 thousand at December 31, 2025.

Distributions, Debt and Liquidity

The board of the general partner approved a cash distribution of $0.60 per unit for the third quarter, or $2.40 per unit annualized, payable on November 13, 2026 to unitholders as of November 6, 2026. The Distribution Coverage Ratio was 1.76x.

Total debt and finance leases were $679.9 million at September 30, 2026, and the total and net leverage ratios were 0.89 times and 0.78 times debt to trailing twelve months Adjusted EBITDA attributable to ARLP. Total liquidity was $430.8 million, made up of $84.8 million of cash and cash equivalents and $346.0 million of borrowings available under the revolving credit and accounts receivable securitization facilities. It also held 673 bitcoins valued at $56.3 million, and capital expenditures were $204,693 thousand for the nine months against $218,521 thousand.

Disclosed Risks and 2026 Guidance

Coal sales price per ton was down 8.3%, and Appalachia coal sales price per ton was $62.35 against $83.28, which the company attributed to a larger mix of lower priced Tunnel Ridge volumes. Appalachia Segment Adjusted EBITDA was $48.5 million against $54.1 million. General and administrative expenses were $27,113 thousand against $21,373 thousand, and income tax expense was $19,042 thousand against $5,886 thousand. On the third quarter call, Craft said tight barge capacity and higher ocean freight and barge costs could limit export volume growth and margins.

The partnership updated full year 2026 guidance: total coal sales of 34.50 to 35.50 million short tons at $54.25 to $54.75 per ton, Segment Adjusted EBITDA Expense of $37.50 to $38.50 per ton, and total capital expenditures of $270 to $290 million. Committed and priced coal sales were 31.7 million tons for 2027. Management said it expects to provide 2027 guidance with fourth quarter results in February.