ARLP vs BTU: Which Is the Better Buy in 2026?
Last updated August 2026
Short answer
ARLP and BTU are similarly sized, but BTU trades noticeably cheaper on forward earnings (5.70x vs 8.92x): the market is paying up for ARLP's profile and pricing BTU more conservatively, or for faster growth. Which you prefer comes down to the drivers you believe, and whether adding either over-concentrates what you already own.
ARLP vs BTU: the tie-breaker metrics
Same yardstick, side by side (as of August 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.
| Metric | ARLP | BTU | What it tells you |
|---|---|---|---|
| Forward P/E | 8.92 | 5.70 | Valuation on next year's expected earnings, the same yardstick for both. Lower is cheaper for that growth; higher means the market is paying up. |
| Beta | 0.20 | 0.37 | Volatility vs the market. Above 1 swings harder than the index; below 1 is steadier. Higher beta means bigger drawdowns to hold through. |
| Price vs 52-week range | 52% of range | 22% of range | Where today's price sits between the 52-week low and high. Near the high is momentum with less margin of safety; near the low is out of favor or a discount, depending on why. |
| Price / book | 1.89 | 0.80 | How much you pay over book value. Very high can signal an asset-light, high-return business or a rich price. |
Reading it: BTU is the cheaper of the two on forward earnings, but cheaper is not the same as better. Pair the valuation with growth (how far the forward P/E sits below the trailing P/E) and risk (beta) before you decide.
Before you buy: how ARLP and BTU affect your concentration
The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. ARLP and BTU share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.
This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined ARLP and BTU exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.
What does Alliance Resource Partners (ARLP) do?
Alliance Resource Partners, L.P. (Nasdaq: ARLP) is a diversified natural resource company structured as a master limited partnership. Its core business mines and markets thermal (steam) coal to US electric utilities and industrial users from seven underground mining complexes across the Illinois Basin and Appalachia, making it one of the largest coal producers in the eastern US. Alongside coal, ARLP has built a meaningful mineral-interests business, earning royalty income from oil and gas production (record BOE volumes in recent quarters) and from coal royalties, which diversifies cash flow away from its own mining operations. The partnership has also accumulated a small digital-asset (bitcoin) position that adds some quarter-to-quarter earnings noise.
What does Peabody Energy Corporation (BTU) do?
Peabody Energy Corporation is a leading global pure-play coal producer, with mining operations in the United States and Australia. It reports through several segments: Seaborne Thermal (mines in New South Wales, Australia, producing low-sulfur, high-Btu thermal coal), Seaborne Metallurgical (mines in Queensland and New South Wales, Australia, plus one in Alabama, producing steelmaking coal), Powder River Basin (large surface thermal mines in Wyoming), and Other US Thermal. Thermal coal is burned to generate electricity, while metallurgical (coking) coal is an input to steelmaking, so Peabody's fortunes are tied to two different global commodity markets plus the price of seaborne freight.
ARLP vs BTU: how do they differ?
Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.
- ARLP drivers: Contracted coal cash flow; Oil and gas royalty growth.
- BTU drivers: Global coal prices drive earnings; Centurion met-coal growth.
Which fits which kind of investor
A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: ARLP faces structural decline in US thermal coal demand as utilities retire coal plants and shift to gas and renewables, which caps long-term volume growth. For BTU, the dominant risk is commodity price cyclicality: with revenue tied to seaborne coal prices, a slowdown in global steel output or a swing in coal supply can compress earnings and cash flow quickly.
ARLP or BTU: which should you pick?
ARLP vs BTU: the full fundamentals
ARLP. ARLP's 2025 revenue of roughly $2.19 billion was down about 10% from 2024 as coal pricing softened, and Q1 2026 net income fell sharply to about $9 million on weaker coal prices plus non-cash impairment and digital-asset charges. With a market cap near $3.2 billion, modest debt of about $508 million, and around 128 million units outstanding, the units are valued largely on cash distributions rather than earnings growth. The high yield reflects both the cash-generative model and the market's discount for coal's long-term demand risk.
BTU. Figures are approximate and tied to the asOf date; verify live numbers before acting. For a cyclical commodity producer, a low earnings multiple can be a trap because it often reflects peak-cycle earnings that may not repeat if coal prices fall, so where seaborne coal prices sit in the cycle matters more than a trailing P/E. Coal producers also tend to trade at discounted multiples versus other sectors partly because of ESG constraints and coal's secular decline, which caps the pool of buyers. Treat any specific figure here as illustrative, not current.
Headline figures (approximate, July 2026): ARLP shows revenue (ttm) ~$2.19B, q1 2026 revenue ~$516M, net income (2025) ~$311M, adjusted ebitda (q1 2026) ~$155M; BTU shows revenue (2025) ~$3.9 billion (approximate, verify live), adjusted ebitda (2025) ~$455 million (approximate, verify live), segments Seaborne Thermal, Seaborne Metallurgical, Powder River Basin, Other US Thermal, profitability Highly cyclical; swings with seaborne coal prices from strong profits to thin margins.
The bottom line: ARLP vs BTU
ARLP and BTU are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined ARLP and BTU exposure against your real portfolio. It is not an investment adviser.
Wondering how ARLP or BTU fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in Alliance Resource Partners with AI
Connect the broker you already use and ask Walnut's AI how ARLP fits what you actually hold: whether you own it already through a fund, what it would do to your concentration, and how it has tracked the S&P 500. Read-only by default, and you approve anything before it reaches your broker.
FAQ
What is the difference between ARLP and BTU?
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Alliance Resource Partners, L.P. Peabody Energy Corporation is a leading global pure-play coal producer, with mining operations in the United States and Australia. They show up together because they share investment themes, but they are different businesses, so the better fit depends on which thesis you are expressing.
Is ARLP or BTU the better stock?
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Neither is universally better; they suit different views and risk levels. Walnut is informational, not investment advice. Compare what each does, the tie-breaker metrics above, and the risks, then decide which fits your thesis and what you already own.
Which is cheaper, ARLP or BTU?
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On forward P/E (as of August 2026), ARLP trades at 8.92x and BTU at 5.70x, so BTU is the cheaper of the two on next year's expected earnings. A lower multiple is not automatically the better buy: a richer valuation can be justified by faster growth, and a lower one can reflect real risk. Weigh the multiple against how fast each business is compounding.
Should you own both ARLP and BTU?
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Because they share themes, owning both concentrates you in that theme. That can be intentional (a focused bet) or accidental (less diversification than it looks). Walnut can show your combined exposure across both, and whether adding either over-concentrates you, before you buy.
What are the risks of ARLP vs BTU?
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ARLP: ARLP faces structural decline in US thermal coal demand as utilities retire coal plants and shift to gas and renewables, which caps long-term volume growth. Earnings are sensitive to coal and energy prices, and recent quarters showed how quickly softer pricing plus non-cash items (a Mettiki longwall impairment and a bitcoin mark-to-market loss) can shrink net income. As an MLP, distributions are not guaranteed and can be cut if cash flow weakens, and the K-1 tax treatment adds complexity for many investors. Regulatory, environmental, and financing pressures on the coal industry are ongoing headwinds, and the small digital-asset position introduces additional earnings volatility. BTU: The dominant risk is commodity price cyclicality: with revenue tied to seaborne coal prices, a slowdown in global steel output or a swing in coal supply can compress earnings and cash flow quickly. Layered on top is coal's long-term secular decline: thermal coal demand faces pressure from renewables, natural gas, and decarbonization policy, and Peabody carries meaningful ESG and regulatory exposure that can limit its investor base and financing options. The terminated Anglo American acquisition led to arbitration proceedings initiated by Anglo American, an unresolved legal and financial overhang. Operational risks are real in mining, as the Moranbah North ignition event that triggered the deal termination showed: incidents can halt production and destroy value. Currency (Australian dollar), freight costs, and mine-life and reserve depletion round out the risk picture for a producer whose profits already swing hard with the cycle.
Walnut is informational, not investment advice. This page is descriptive and not a recommendation to buy or sell ARLP or BTU; figures are approximate and dated (as of August 2026). Verify current data before investing.