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:
Group of smiling coal miners in a coal mine

Image source: Getty Images

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?

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.

Created with Highcharts 11.4.3New Hope PriceZoom1M3M6MYTD1Y5Y10YALLwww.fool.com.au

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

Person handing out $100 notes, symbolising ex-dividend date.
Dividend Investing

5 excellent ASX dividend shares to buy in May

Analysts think these shares are top picks for income investors next month.

Read more »

ETF written on cubes sitting on piles of coins.
Dividend Investing

How can an ASX investment in the Vanguard Australian Shares High Yield ETF (VHY) boost my passive income?

ETFs can be fantastic hands-off sources of passive income.

Read more »

A young male builder with his arms crossed leans against a brick wall and smiles.
Dividend Investing

Building up income: 2 ASX dividend shares I believe are a buy

These stocks are delivering pleasing passive income growth.

Read more »

Australian dollar notes in the pocket of a man's jeans, symbolising dividends.
Dividend Investing

Is this a great opportunity to lock in big dividend yields for a second income?

Has the market selloff created an opportunity for income investors? Let's find out.

Read more »

An athlete runs fast with a trail of yellow smoke billowing out behind him.
Dividend Investing

Don't miss out on these buy-rated ASX 200 dividend shares

Analysts are bullish on these names. Let's find out why.

Read more »

Hand of a woman carrying a bag of money, representing the concept of saving money or earning dividends.
Dividend Investing

Top broker says these ASX dividend stocks are strong buys

Here's why its analysts are feeling bullish on these names.

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Dividend Investing

Buy these highly rated ASX dividend stocks for 5% to 6% yields

These stocks could be quality picks for income investors according to analysts.

Read more »

Modern accountant woman in a light business suit in modern green office with documents and laptop.
Dividend Investing

With an almost 7% dividend yield, is this ASX 200 share a buy?

This business offers significant passive income potential.

Read more »