Here’s how much I’d need to invest in New Hope shares to generate a $250 monthly income

New Hope Corp Ltd (ASX: NHC) shares closed up 5.26% on Wednesday after gaining 8.6% on Tuesday.

At the closing bell yesterday, the S&P/ASX 200 Index (ASX: XJO) coal stock was trading for $5.60 a share.

Investors have been snapping up New Hope shares since the company reported its half-year results on Tuesday.

With profits having just more than doubled from the prior corresponding half year, fuelled by soaring coal prices, the board declared a record 40 cents per share interim dividend, fully franked.

That came in the form of a 30-cents per share ordinary dividend and a 10-cent per share special dividend.

So, how much of the stock will I need to buy to generate a handy $250 monthly income?

How many New Hope shares will I require?

Well, first off, with New Hope shares up 14.2% over the past two trading days, I’ll be paying a fair bit more for them than if I’d bought the ASX coal stock on Monday.

Though that won’t affect the number of shares I need to buy.

To receive the latest dividend, I’ll need to own those shares at market close on 17 April. That’s when the stock trades ex-dividend. I can then expect to be paid on 3 May.

Atop the 40 cents per share interim dividend, New Hope shares also delivered a final, fully franked dividend of 56 cents per share on 20 December.

That equates to a 96 cents per share full-year dividend, working out to a trailing yield of 17.2% at yesterday’s closing price.

To be clear, there is no guarantee that future payouts will match those made or declared over the past 12 months. They could be lower. Or they could be higher. Much of that will depend on the coal price.

So, working with the trailing yield figure, to generate $250 in monthly income (or a welcome $3,000 per year), I’d need to buy 3,125 New Hope shares today.

Happy income investing!

The post Here’s how much I’d need to invest in New Hope shares to generate a $250 monthly income appeared first on The Motley Fool Australia.

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