Arlp a strong buy?

Alliance Resource Partners (ARLP) is currently considered a strong buy. Here's why:

1. Attractive Dividend Yield: ARLP offers an 11% dividend yield, which is a significant advantage for income investors. The company's dividend payout ratio is low at 50.36%, indicating that it retains earnings for reinvestment and minimum dividend payouts, which could lead to future growth.
2. Strong Financial Performance: ARLP reported record revenue of $2.6 billion in FY'22, with a net income growth of 7.5% year-over-year. The company's Oil & Gas Royalty business also reported record BOE volumes. Additionally, the diluted EPS for Q2 2024, was $0.77, which is in line with expectations.
3. Undervaluation: The company's P/E(TTM) ratio is 5.42, which is lower than the industry average, indicating that ARLP may be undervalued. This is supported by the Zacks Rank of #2 (Buy) and the A grade for Value, suggesting that the stock is undervalued at its current share price.
4. Strategic Position and Growth Prospects: ARLP's strategic positioning in the coal markets and its focus on international customers and domestic utility companies position it well for continued growth. The company's Oil & Gas Royalty business also reported record BOE volumes, indicating potential for future earnings growth.
5. Institutional Confidence: The purchase of ARLP shares by First Trust Advisors LP, a significant institutional investor, signals confidence in the company's future performance and potential for growth in the sector. This move by a knowledgeable investor suggests that ARLP may be a good investment opportunity.
6. Consensus and Price Target: The consensus rating is a "Strong Buy" with an average price target of $26, indicating a potential upside from the current trading price. This is supported by the price target increase by Benchmark, which reflects growing confidence in the stock's future performance.

In conclusion, ARLP's attractive dividend yield, strong financial performance, undervaluation, strategic position, and institutional confidence make it a compelling buy. The consensus rating and price target further support the view that ARLP is a strong buy.