Image Source: Pixabay

As part of our ongoing series, each week we will focus on one of the stocks from our stock screeners, and take a look at why it’s a ‘buy’ based on key fundamentals. One of the cheapest stocks in our stock screeners is: Peabody Energy Corp.

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.

The 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 has moved up 4.62%. Here’s why the company is undervalued.

Image Source: Google Finance

Key Stats

• Market cap: $2.93 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 Percentage:

• FCF/MC yield: 15%

Shareholder Yield Percentage:

• Shareholder yield: 17.20

Other Indicators

• Piotroski F score: 5.00
• Dividend yield percentage: 1.5
• ROA (five-year average percentage): 12

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