NACCO Industries (NC): A Coal-Fueled Contrarian Gem in a Bearish Energy Market

The energy sector has been a bloodbath this year, but one stock is breaking free of the gloom—and I’m not talking about the usual suspects. NACCO Industries (NYSE: NC) just delivered a 14% weekly surge, defying the broader collapse in energy stocks, and I’m telling you: this is a rare contrarian opportunity.

Let me show you why this coal-centric company is primed to outperform—thanks to a Trump-era policy revival, dividend discipline, and a hidden growth engine in lithium.

The Trump Coal Policy: A Tailwind Ignoring the Headwinds

The stock’s 14% pop in mid-May didn’t happen by accident. It was triggered by President Trump’s April 8 executive order, which rebranded coal as a “national security asset” and slashed red tape for mining on federal lands. This isn’t just political theater—NACCO’s Coal Mining division saw a $3.8M operating profit in Q1 2025, reversing a year-ago loss.

While the S&P Energy Sector has tanked 8% since Trump’s order, NC is up 22%. The policy’s impact is clear: NACCO’s revenue jumped 14.7% over the past year, and its P/E ratio of 7.27 is a screaming value signal in a sector where most energy stocks trade at 15x earnings or higher.

Dividend Discipline: Resilience in a Volatile Market

NC isn’t just a coal play—it’s a dividend powerhouse with 55 years of uninterrupted payouts, including an 11% hike in May to $1.01 annualized. This isn’t reckless generosity:

• The dividend yield is 2.59%, handsomely above the S&P 500’s 1.3%.
• NACCO’s balance sheet is bulletproof: a current ratio of 3.42 means it can cover liabilities three times over.

But wait—critics will point to negative earnings (-$2.32 EPS). Here’s why that’s noise: NACCO’s dividend is paid out of operating cash flow, not net income. And with $65.57M in Q1 revenue, the cash is there.

The Contrarian’s Secret Weapon: Lithium & Renewables

Here’s where the skeptics miss the boat: NACCO isn’t a relic. It’s a dual-play stock with lithium projects in Nevada’s Thacker Pass (partnered with Lithium Americas and GM) and solar initiatives. These aren’t side bets—they’re strategic pivots to capture the EV and renewable energy boom.

While the market fixates on coal’s decline, NACCO is quietly building a minerals business that could be its next cash cow. The company’s Q1 report called for moderate operating profit growth in both coal and minerals—proof this isn’t a one-trick pony.

Why Buy Now? The Setup Is Perfect

• Valuation: At $35.82, NC trades at just 7.27x earnings, but that’s a mirage. Strip out one-time charges, and the true earnings power is much higher.
• Supply Chain Shift: With global coal prices up 18% YTD and lithium projects ramping, NACCO’s backlog is bulging.
• Relative Strength: The stock’s 50-day moving average is rising, and volume spiked on May 15—the day the dividend hike was announced.

The Bottom Line: Buy Now—Before the Crowd Catches On

This is a contrarian’s dream: a dividend machine with a 55-year track record, a P/E half the sector’s average, and exposure to both coal’s comeback and lithium’s future. The risks? Sure—regulatory setbacks or a lithium price slump. But at this price, the reward dwarfs the risk.

Action: Buy NC now. Set a target of $45—then hold on for the ride.

Disclaimer: Past performance does not guarantee future results. Always conduct your own research before making investment decisions.