New Hope Corp Ltd (ASX: NHC) shares have not only trounced the S&P/ASX 200 Index (ASX: XJO) over the past year, they've also delivered some outsized passive income.
The ASX 200 coal share reported that its profits for the six months through to 31 January had more than doubled year on year.
This led the miner to declare a record high interim dividend of 40 cents per share, fully franked. That passive income will have landed in shareholders' bank accounts on 3 May.
The record interim dividend followed on an all-time high final dividend of 56 cents per share, which was paid on 8 November.
That comes out to a full-year payout of 96 cents per share.
At yesterday's closing price of $5.33, that equates to a trailing yield of 18%.
Or just north of $897 in passive income from a $5,000 investment at the current New Hope share price, with potential tax benefits from those franking credits.
But as I said up top, beyond the passive income they've delivered, New Hope shares have also gained an impressive 35% over the past 12 months.
That compares to a 2% full-year gain posted by the ASX 200.
Image source: Getty Images
Why New Hope shares are well-placed to deliver more outsized passive income
Yesterday, the ASX 200 miner reported its quarterly results for the three months through to 30 April.
Among the highlights that sent New Hope shares to close up 3.5% yesterday was a 20.6% year-on-year increase in underlying earnings before interest, taxes, depreciation and amortisation (EBITDA). EBITDA for the quarter came in at $448 million.
That bodes well for the passive income that shareholders may expect from their New Hope shares when the miner pays its final dividend in November.
As does the miner's strong balance sheet.
New Hope reported that after it had made its dividend payouts, it had a closing cash and cash equivalents balance of $827 million.
And the ASX 200 coal miner is aiming to earn some passive income of its own, via fixed income opportunities arising amid rocketing interest rates.
According to management:
Due to the rising rate environment the company is now earning material net interest income on its positive cash balances, which may be further enhanced later in the year by a partial allocation to cash equivalent and fixed income opportunities.
Management also noted that with continuing tight global coal supplies, "The outlook for the remainder of calendar year 2023 remains positive."
And investors buying New Hope shares with an eye on that passive income will be pleased by this nugget, contained in the release:
The company is focused on stable, growing returns to shareholders through dividends and ensuring the significant value of the company's franking account is utilised.
The company expects that dividend payments and share buybacks will be maintained as the predominate capital management activities.
Happy income investing!
