Why Peabody Energy Corp (BTU) Stock Is A Buy? Acquirer’s Multiple Stock Screener Analysis

As part of our ongoing series here at The Acquirer’s Multiple, each week we focus on one of the stocks from our Stock Screeners, and why it’s a ‘buy’ based on key fundamentals.

One of the cheapest stocks in our Stock Screeners is:

Peabody Energy Corp (BTU)

Peabody Energy Corp is a producer of metallurgical and thermal coal. It also markets and brokers coal, both as principal and agent, and trades coal and freight-related contracts. The company operates in the following segment: Seaborne Thermal, Seaborne Metallurgical, Powder River Basin, Other U.S. Thermal and Corporate and Other. Powder River Basin segment generates the majority of the revenue for the company. A substantial part of its overall revenue is generated from its customers in the United States, and rest from Japan, China, Australia, Taiwan and other regions.

A quick look at the share price history (below) over the past twelve months shows that the price is up 4.62%. Here’s why the company is undervalued.

Source: Google Finance

Key Stats

Market Cap: $2.73 Billion

Enterprise Value: $2.33 Billion

Operating Earnings

Operating Earnings: $660 Million

Acquirer’s Multiple

Acquirer’s Multiple: 3.50

Free Cash Flow (TTM)

Free Cash Flow: $409 Million

FCF/MC Yield %:

FCF/MC Yield: 15%

Shareholder Yield %:

Shareholder Yield: 17.20

Other Indicators

Piotroski F Score: 5.00

Dividend Yield %: 1.5

ROA (5 Year Avge%): 12