CNX Coal Resources - 13.7% Yield Protected For Years By Contracts And Common Unit Priority

CNX Coal Resources LP (NYSE: CNXC) is a recently formed coal MLP that went through a difficult IPO due to the poor current sentiment around the coal market. It initially wished to sell 10 million units at $19 to $21 per unit, but ended up selling 5 million units to the public at $15 per unit and another 5 million units to David Einhorn's Greenlight Capital at the same $15 per unit.Despite being dragged down by the overall attitude toward coal companies right now, CNX Coal Resources should provide excellent returns at $15 per unit. It has coal contracts that should nearly guarantee that it will have enough distributable cash flow to maintain a $2.05 distribution until at least the end of 2017. Beyond that, it should be able to maintain its distribution if the price of natural gas is around $3.50 or if the metallurgical coal market recovers somewhat. If natural gas remains at current levels, it should be able to still deliver enough distributable cash flow in 2018 and beyond for a 10% yield on current unit prices.The NAPP MinesCNX Coal Resources has a 20% stake and operational control over CONSOL Energy's (NYSE: CNX) Pennsylvania mining complex. This complex consists of the Bailey, Enlow Fork and Harvey mines which have 786 million tons of reserves from the Pittsburgh coal seam. These mines can produce up to 28.5 million tons per year, resulting in over 27 years of reserves. The Bailey mine has the shortest mine life of the three mines, but still has 22 years of reserves. CONSOL... Read more