Coal prices are at record highs amid the global energy crisis, and market watchers believe prices are yet to rise further. The clean energy transition was expected to eliminate coal – the most polluting of all fossil fuels. Instead, the price of thermal coal used for power generation has nearly tripled since the beginning of the year. The global effort to curb carbon emissions has come to a halt as governments scramble to secure their energy needs amid supply constraints caused by the Ukraine war. Russia’s move to cut gas supplies to Europe has also forced the bloc to seek alternative fuel sources – including coal from Australia – before the cold months. Investors should buy coal-related equities to capitalize on rising demand, according to Peter O’Connor, senior analyst at Shaw & Partners, a Sydney-based boutique investment firm. “Coal equities around the world will perform well, and the tailwind from their lows in June 2020 will remain high. The cash they generate is exceptional,” he said. “It’s like almost any or all companies.” His preferred stock pick in Australia is coal producer Whitehaven. Read more Wall Street Pro Predicts When the S&P 500 Will Rally — and Explains How to Trade Tesla or Rivian? Analysts Shape Them And Position Oil Markets To A ‘Bullish Shock’ A 190% Up? Here are a strategist’s top stocks to cash in. The company delivered an exceptional performance for the most recent fiscal year, reporting record net profit and revenue. It also made 2.6 billion Australian dollars ($1.79 billion) in cash from its operations during the period, a massive increase from the $169.5 million it generated a year earlier. “Whitehaven can effectively buy back about 10% of its company each month, given how much cash it is generating,” O’Connor said. The company also pays good dividend. According to data from FactSet, Whitehaven’s dividend yield is 7.4%, which is significantly higher than the industry average of 3.5%. To be sure, there could be limited short-term upside for the stock after a meteoric rise this year. Shares of the company hit a 52-week high of AU$8.74 last week, giving the stock a nearly 220% gain since the start of the year. But it remains a favorite among analysts, FactSet data shows, with a 71% buy rating on the stock. Meanwhile, Kenny Polkari, chief market strategist at Slatestone Wealth, named US coal mining firm Peabody Energy the favorite in the space. The Missouri-based firm has also benefited from a hike in coal prices this year and the company’s shares have risen more than 100% since early 2022. With coal prices skyrocketing, meanwhile, coal prices are set to remain high for the foreseeable future. According to data from Eikon, the price of spot physical coal loaded at Newcastle port in Australia was $441.19 a tonne on Monday, trading at an all-time high. Coal futures are also trending up. Eikon data showed the contract price for October delivery of Newcastle coal stood at $430.60 on Friday, hitting a previous week’s high. Data aggregation platform Trading Economics forecasts coal prices to trade at $461.49 by the end of September, rising to $551.06 in 12 months. O’Connor also expects coal prices to remain high for a long time. “With the water production level of electricity low and the price of energy very high in Europe, the price of coal will remain high … if [coal price] Remains above $425/tonne… this is a medium term breakout, very important charting position, which should propel the trade higher,” he told CNBC “Street Science Asia” on Friday.