The U.S. coal industry is in big trouble. It’s been hit by cheap natural gas, environmental regulations and foreign competition. As a result, we’re burning less coal.

It has gotten so bad that nearly half of U.S. coal comes from companies that have declared bankruptcy in the last decade.

Natural Resource Partners (NYSE: NRP) almost became one of them. Instead, the company embarked on an aggressive turnaround plan to save its business in 2015.

Three years later, the company has made great strides reducing its debt load and leverage ratio. And Natural Resource Partners currently sports a 6% dividend yield.

Let’s find out if that attractive yield will last.

Last year, Natural Resource Partners generated $132.14 million of distributable cash flow (DCF). DCF is a master limited partnership’s measure of cash flow.

DCF was down 51.32% from the $271.42 million the company produced in 2016. DCF has declined as Natural Resource Partners has sold off some of its assets and paid down debt.

Despite the decline, Natural Resource Partners still had more than enough cash to cover the $22.5 million of distributions it paid out to shareholders. In 2017, its payout ratio was just 17.03%.

This year, DCF is expected to decline another 35.66% to $85.02 million. Natural Resource Partners will still generate enough cash to comfortably cover the $30.2 million in distributions that it’s expected to pay out in 2018, but having two consecutive years of declining DCF isn’t a good sign.

And this isn’t the first or second time that Natural Resource Partners has taken such extreme measures.

In 2015, management slashed its distribution payout by a whopping 75%. That followed a 36% cut the year before in 2014.

Management proved then that the dividend isn’t sacred. And if hard times hit the company again, it’s highly likely that Natural Resource Partners would make another distribution cut.

Investors’ worries about coal market uncertainty aren’t unfounded. And if the market goes south, Natural Resource Partners’ distribution will be on the chopping block… again.

Natural Resource Partners’ business turnaround has come a long way, but the distribution is far from safe.

Dividend Safety Rating: F

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Good investing,