Is there any stopping the Whitehaven share price?

The Whitehaven Coal Ltd (ASX: WHC) share price is charging higher today.

Again.

Shares in the S&P/ASX 200 Index (ASX: XJO) coal miner are up 4.7% at the time of writing on Friday, currently trading for $10.96 apiece.

The ASX 200, meanwhile, is down 0.6% following a sell-off in US markets overnight.

With today’s gains factored in, the Whitehaven share price is now up an eye-popping 295% in 2022. That sees it command a market cap north of $10 billion.

And don’t forget the dividends.

Atop the massive share price gains, Whitehaven has paid out 48 cents per share in dividends this year. That works out to a current trailing dividend yield of 4.4%, fully franked.

And with revenues soaring amid record-high coal prices, the miner trades on a price-to-earnings (P/E) ratio of less than five times.

Which begs the question…

Is there any stopping the Whitehaven share price?

The Whitehaven share price has clearly benefited from soaring thermal and coking coal prices. The miner has a significant footprint in both, though it derives more revenue from thermal coal.

Thermal coal, primarily used to generate electricity, hit record highs this year and remains near those records, spurred higher by Russia’s invasion of Ukraine.

According to the federal Industry, Science & Resources Department’s latest quarterly Resources and Energy Report, the price outlook for coking coal, used to produce steel, could come under some pressure amid a weakening outlook for steel markets, with demand from China forecast to fall. However, wet weather conditions driven by the El Nina event could hamper new supplies and help support prices.

On the thermal coal front, the Whitehaven share price should continue to receive some strong tailwinds over the coming months.

Thermal coal prices hit US$450 per tonne in September and are currently trading for US$400 per tonne. Still, that’s more than double the price in early January this year.

According to the federal government report, “Thermal coal prices remain extremely high, driven by weather and COVID-19 disruptions, as well as market uncertainties linked to the Russian invasion of Ukraine.”

The report notes:

The exclusion of large quantities of Russian coal from markets in the Northern Hemisphere could inflate coal prices for years to come.

Australian thermal coal prices remain extremely high, as European nations look to build stockpiles ahead of the Northern Hemisphere winter.

Europeans embracing coal to keep the lights and heat on may not be great news for the environment. But it should continue to offer support to the booming Whitehaven share price.

The post Is there any stopping the Whitehaven share price? appeared first on The Motley Fool Australia.

.

More reading

• After a smashing first quarter, what’s the outlook for ASX coal shares in Q2?
• Here are the top 10 ASX 200 shares today
• 3 ASX 200 shares smashing all-time highs on Thursday
• These were the best-performing ASX 200 shares in the first quarter of FY23
• Whitehaven shares are being pulled in all directions today. Is this why?

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.

from The Motley Fool Australia https://ift.tt/jKT6iY2