Do New Hope shares really pay a 17.6% dividend yield?

New Hope shares leapt 9% on Tuesday after the ASX 200 coal miner declared a record interim dividend.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

New Hope Corp Ltd (ASX: NHC) shares are down 1.35% in early afternoon trading on Friday.

Shares in the S&P/ASX 200 Index (ASX: XJO) coal stock closed yesterday trading for $5.54. Shares are currently changing hands for $5.47 apiece.

Keep that price in mind, as it will enable us to address the question, do New Hope shares really pay a 17% dividend yield?

Group of smiling coal miners in a coal mine

Image source: Getty Images

Does the ASX 200 coal miner really pay a 17.6% dividend yield?

The answer is yes.

And no.

Let me explain.

The ASX 200 coal miner reported some stellar half-year results on Tuesday, which saw New Hope shares close up 8.6% on the day.

On the back of record-high coal prices during the six-month period, the company saw its after-tax profits increase a remarkable 101% from the prior corresponding half-year period.

This encouraged the New Hope board to declare a 30 cents per share ordinary dividend and a 10 cents per share special dividend, both fully franked.

Now the stock doesn't trade ex-dividend until 17 April.

Until that time, the official dividends over the last 12 months come from the final dividend of 56 cents per share (ex-dividend on 24 October). And the 30 cents per share interim dividend (ex-dividend on 14 April 2022).

With those numbers, New Hope shares pay a trailing yield of 15.8%.

Not bad. But a bit short of 17.6%.

However, if you hold the shares at market close on 17 April, you'll then be holding a stock that's paid out 96 cents per share over the prior 12 months rather than 86 cents per share. 

Buying in at today's $5.45 per share, that works out to a yield of 17.6%.

The interim dividend will be paid on 3 May.

How have New Hope shares been performing?

As you can see on the chart below, New Hope shares have been strong outperformers over the past 12 months, up 60%.

For some context, the ASX 200 is down 6% over that same period.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Dividend Investing

a man in a business suit looks at a map of the world above a line up of oil barrels with a red arrow heading upwards above them, indicting rising oil prices.
Dividend Investing

If the oil price remains above US$100, Woodside shares could be raining dividends before Christmas

Surging oil prices are no fun at the petrol station, but they could be a boon for upcoming Woodside dividends.

Read more »

A wad of $100 bills of Australian currency lies stashed in a bird's nest.
Dividend Investing

Should you buy New Hope shares for passive income today?

New Hope reported on its upcoming passive income payout this morning.

Read more »

Happy dad watching tv with kids, symbolising passive income.
Dividend Investing

3 of the best ASX income stocks to buy now

These ASX companies generate strong cash flow that supports shareholder payouts.

Read more »

Man holding fifty Australian Dollar banknote in his hands, symbolising dividends, symbolising dividends.
Dividend Investing

Forget term deposits! I'd buy these two ASX 200 shares instead

These businesses have solid dividend records and rising payouts.

Read more »

Animation of a man measuring a percentage sign, symbolising rising interest rates.
Dividend Investing

71% chance of RBA hike? These ASX dividend shares still beat rising interest rates

Big dividend yields are forecast for these dividend shares.

Read more »

Three women dance and splash about in the shallow water of a beautiful beach on a sunny day.
Share Market News

3 legendary ASX dividend shares worth a closer look

The companies all boast strong market positions and steady cash flow.

Read more »

Australian dollar notes and coins in a till.
Dividend Investing

How many Westpac shares do I need to buy for a $10,000 annual passive income?

Westpac shares have a lengthy track record of paying two fully franked dividends every year.

Read more »

Man with his arms spread wide in a field.
Dividend Investing

Why this ASX REIT is a retiree's dream

Looking for a reliable investment? I’d go for this one…

Read more »