| dc.description.abstract | In this paper, I establish a theoretical background of established theories explaining how the intended behavior of coal stock is
The goal of the thesis is to provide an answer to the question “Do Coal stocks sufficiently reflect the shift towards sustainable energy and net zero emissions?”
As the theory tells us that coals stocks are reflecting a shift towards sustainable energy, I need to examine several results up against expectations and see if they match.
I select five representative companies for the coal sector, with three different locations, China, USA, and EU, to examine the different results between them.
I use these representative companies and look at annual reports to find financial information and balance sheets, and look at the following attributes to determine if they fit the expected values in the following attributes:
ESG Rating – They fit well; everything is as theory expects.
WACC – The cost of capital, again everything fits the theory of higher-than-average cost of capital for coal related stocks.
Price – Mostly as expected, but there is some deviancy here that opposes the “yes” to the research question. Prices increasing short term in 2022 is okay, as there is relevant theory to explain it.
P/e Ratio – Mostly fits with existing theory, enough to pass it for this category
Revenue and cost growth – Not as expected
Overall results are mostly as expected; however, the revenue and cost growth were not as expected from the theory, and therefore I cannot give the answer to the question on if the stock reflect the shift sufficiently with a clear yes. The answer is currently “Likely yes” but further research is required into the failing attributes. | |
