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New Hope Corp Ltd's Dividend Analysis

An In-Depth Look at the Company's Dividend Performance and Sustainability

New Hope Corp Ltd (NHPEF) recently announced a dividend of $0.09 per share, payable on 2023-11-07, with the ex-dividend date set for 2023-10-23. As investors anticipate this upcoming payment, it's crucial to examine the company's dividend history, yield, and growth rates. Using data from GuruFocus, we delve into New Hope Corp Ltd's dividend performance and assess its sustainability.

Understanding New Hope Corp Ltd

New Hope Corporation is an Australian thermal coal miner. It operates two mines: the fully-owned New Acland coal mine in Queensland and its 80%-owned Bengalla coal mine in New South Wales. The company is projected to produce around 13 million metric tons of equity salable thermal coal annually from fiscal 2027, up from approximately 8 million in fiscal 2023. The majority of New Hope's production is sold into seaborne thermal coal export markets. Reserves at New Acland and Bengalla are sufficient to support multidecade mine lives. New Hope also has significant undeveloped coal resources in Queensland and holds a 15% stake in the Malabar-Maxwell metallurgical coal mine, which began production in 2023.

New Hope Corp Ltd's Dividend Analysis
New Hope Corp Ltd's Dividend Analysis

Reviewing New Hope Corp Ltd's Dividend History

Since 2021, New Hope Corp Ltd has maintained a steady dividend payment record. Dividends are currently distributed bi-annually. The chart below shows the annual Dividends Per Share for tracking historical trends.

New Hope Corp Ltd's Dividend Analysis
New Hope Corp Ltd's Dividend Analysis

Analyzing New Hope Corp Ltd's Dividend Yield and Growth

As of today, New Hope Corp Ltd has a 12-month trailing dividend yield of 9.77% and a 12-month forward dividend yield of 6.60%, indicating an expected decrease in dividend payments over the next 12 months.

Over the past three years, New Hope Corp Ltd's annual dividend growth rate was 59.60%. This rate decreased to 25.80% per year over a five-year horizon. Over the past decade, New Hope Corp Ltd's annual dividends per share growth rate stands at an impressive 11.90%. Based on the company's dividend yield and five-year growth rate, the 5-year yield on cost of New Hope Corp Ltd stock as of today is approximately 30.78%.

New Hope Corp Ltd's Dividend Analysis
New Hope Corp Ltd's Dividend Analysis

Evaluating Dividend Sustainability: Payout Ratio and Profitability

The dividend payout ratio helps evaluate the sustainability of the dividend. It provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, ensuring the availability of funds for future growth and unexpected downturns. As of 2023-07-31, New Hope Corp Ltd's dividend payout ratio is 0.51.

The profitability rank offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks New Hope Corp Ltd's profitability 6 out of 10 as of 2023-07-31, suggesting fair profitability. The company has reported net profit in 7 years out of the past 10 years.

Growth Metrics: The Future Outlook

For dividends to be sustainable, a company must have robust growth metrics. New Hope Corp Ltd's growth rank of 6 out of 10 suggests a fair growth outlook. Revenue is the lifeblood of any company, and New Hope Corp Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. New Hope Corp Ltd's revenue has increased by approximately 31.70% per year on average, a rate that outperforms approximately 66.95% of global competitors.

Conclusion

In conclusion, New Hope Corp Ltd's consistent dividend payments, impressive growth rate, reasonable payout ratio, fair profitability, and strong growth metrics make it an attractive option for dividend investors. However, investors should keep an eye on the expected decrease in dividend payments over the next 12 months. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

This article first appeared on GuruFocus.

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