NACCO Industries, Inc.

$41.33

+1.18%

N/A+$0.48

Energy

Coal

NYSE

Active Trading

NACCO Industries, Inc. (NC) primarily operates within the natural resources sector, structured into three core business units. Its Coal Mining division manages ...

Fundamental Analysis of NC

Key Strengths

Diversified business model across coal, aggregates, lithium, and royalty management reduces single-commodity risk.

Conservative financial management with strong liquidity (current ratio >3) and low debt-to-equity (0.29).

Risk Factors

Declining coal demand due to environmental regulations and competition from natural gas and renewables.

Negative operating margin and interest coverage ratio indicate operational weakness on a TTM basis.

Profitability

Net Margin6.21%

Operating Margin-9.47%

Valuation

P/E Ratio17.89x

Current Ratio3.30

Efficiency

ROE4.00%

ROA2.55%

Fundamental Analysis of NC

NACCO Industries, Inc. (NYSE: NC) is a diversified natural resources company with a century-long operating history, structured into three segments: Coal Mining, North American Mining, and Minerals Management. The company provides contract mining services for coal, aggregates, lithium, and other minerals, and monetizes royalty interests through leasing. As of February 2025, NACCO has a market capitalization of approximately $313 million, trading at $42 per share, with a beta of 0.46, indicating lower volatility relative to the broader market. The stock currently offers a dividend yield of 2.4% and trades at a price-to-earnings ratio of 18.2, a price-to-book ratio of 0.73, and a price-to-sales ratio of 1.12. The company's financial position is characterized by a current ratio of 3.3 and a quick ratio of 2.3, reflecting strong short-term liquidity. Debt levels are moderate, with a debt-to-equity ratio of 0.29 and an interest coverage ratio of -4.97 (TTM), which is a concern due to negative operating income on a TTM basis. However, net income is positive due to non-operating items, resulting in a net margin of 6.2%. Return on equity is low at 4.0%, and return on assets is 2.6%. Revenue growth has been volatile, with a recent downturn. The company faces secular headwinds in coal demand due to environmental regulations and competition from natural gas and renewables, but has diversified into aggregates and lithium mining services. The Minerals Management segment provides stable royalty income. Overall, the company shows financial stability and a conservative risk profile, but growth prospects are limited. The valuation appears reasonable, but the negative free cash flow and declining operating margins are concerning. A long-term view suggests a 'hold' rating, with medium-term 'buy' potential if coal headwinds stabilize and diversification gains traction.

Key Strengths of NC

Diversified business model across coal, aggregates, lithium, and royalty management reduces single-commodity risk.
Conservative financial management with strong liquidity (current ratio >3) and low debt-to-equity (0.29).
Long-term contracts in coal mining provide revenue stability.
Minerals Management segment offers royalty income with low capital intensity.
Experienced management with long industry track record.
Attractive valuation: price-to-book below 1, low P/E relative to historical earnings.
Dividend yield of 2.4% with manageable payout ratio (44%).

Risk Factors of NC

Declining coal demand due to environmental regulations and competition from natural gas and renewables.
Negative operating margin and interest coverage ratio indicate operational weakness on a TTM basis.
Negative free cash flow, with capital expenditures exceeding operating cash flow (capex to OCF >1).
Exposure to cyclicality in mining and construction industries.
Potential delays or cancellations in new mining contracts, especially lithium.
Regulatory and permitting risks across multiple jurisdictions.
Low return on equity and assets suggest capital efficiency challenges.
Reliance on a small number of customers in coal segment.

Market Cap vs Revenue & Earnings

Earnings

n/a

Revenue

n/a

Market cap

$308.02M

17.9x

P/E Ratio

1.1x

P/S Ratio

Earnings & Revenue

Last Reportedn/a

Earnings per share (EPS)n/a

Gross Margin18.31%

Net Profit Margin6.21%

Debt/Equity Ratio0.29

Profitability Bridge (Current vs YoY)

How gross, operating and net margins shifted versus last year.

Revenue / Net Income / FCF History (USD B)

Growth Signals of NC

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
Revenue	—	—	—	—	Flat
Diluted EPS	—	—	—	—	Flat
Free Cash Flow	—	—	—	—	Flat

Profitability of NC

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
Net Margin	—	-1.33%	—	—	Flat
Operating Margin	—	-3.14%	—	—	Flat
ROE	—	—	—	—	Flat

Financial Health of NC

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
Current Ratio	—	3.296	—	—	Flat
Quick Ratio	—	2.334	—	—	Flat
Debt / Equity	—	0.291	—	—	Flat

Valuation of NC

Metric	Current	Previous	YoYYear-over-Year change: current quarter versus the same quarter last year.	QoQQuarter-over-Quarter change: current quarter versus the immediately previous quarter.	Signal
P/E	—	-96.25x	—	—	Flat
P/B	—	0.87x	—	—	Flat

Supply Chain of NC

RELATIONS

Upstream

Caterpillar Inc.NYSE:CATKomatsu Ltd. (incl. former Joy Global / P&H Mining)TSE:6301Dyno Nobel Limited (formerly Incitec Pivot)ASX:DNLOrica LimitedASX:ORICummins Inc.NYSE:CMIBridgestone CorporationTSE:5108Michelin SCAENXTPA:MLHitachi Construction Machinery Co., Ltd.TSE:6305Peabody Energy CorporationNYSE:BTUAB Volvo (Volvo CE)OM:VOLV.BLiebherr-International AGSandvik ABOM:SAND

Downstream

Rainbow Energy Center, LLCBasin Electric Power Cooperative (via Dakota Coal Company)Choctaw Generation / Red Hills Power PlantNavajo Transitional Energy Company (NTEC)American Electric Power (AEP) / Pirkey Power PlantNASDAQ:AEPVarious Aggregate/Limestone/Sand & Gravel ProducersOil & Gas Exploration and Production Companies (various)Tennessee Valley Authority (TVA)NYSE:TVE

Proxies

Peabody Energy CorporationNYSE:BTU Arch Resources Inc. (formerly Arch Coal)NYSE:ARCH Consol Energy Inc.NYSE:CEIX Hallador Energy CompanyNASDAQ:HNRG Hyster-Yale Materials Handling, Inc.NYSE:HY

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Plutux is not an investment adviser. Market data and AI-generated analysis are for information and education only, not investment advice. Disclaimer