If youâre looking for big dividends, then you will be hard-pressed to find anything larger than what could be on offer with New Hope Corporation Limited (ASX: NHC) shares.
According to a recent note out of Morgans, its analysts are expecting the ASX 200 coal miner to provide investors with double-digit dividend yields through to at least FY 2025.
What is Morgans saying about this ASX 200 share?
The note reveals that Morgans has an add rating and $6.35 price target on the coal minerâs shares. Based on the current New Hope share price of $5.46, this implies potential upside of 16.3% for investors over the next 12 months.
While the ASX 200 companyâs recent half-year results were a touch softer than Morgans was expecting, the broker remains very positive on the investment opportunity here.
Particularly given its belief that âNHCâs Bengalla expansion (ongoing) and Acland ramp-up (from late 2023) are material cashflow contributors which look under-recognised by the market.â
In addition, the broker has âconfidence that NHC wonât over-reach into M&Aâ and âthe eventual return of surplus capital to shareholders is more likely than a large acquisition.â
Speaking of which, Morgans is forecasting some very big dividend yields in the coming years.
Big dividends are coming
The note reveals that Morgans is expecting New Hope to pay a fully franked $1.00 per share dividend in FY 2023, then $0.90 per share in FY 2024, and finally $0.70 per share in FY 2025.
Based on where this ASX 200 share is currently trading, this will mean huge yields of 18.3%, 16.5%, and 12.8%, respectively.
To put this into context, a $20,000 investment would provide income investors with dividends of $3,660, $3,300, and then $2,560, respectively.
Thatâs almost $10,000 in dividends in just three years from a $20,000 investment. No wonder Morgans is bullish!
The post Passive income: Broker says buy this ASX 200 share for an 18% dividend yield appeared first on The Motley Fool Australia.
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More reading
- 3 dividend stocks with the biggest ASX 200 yields. Time to buy?
- How Iâd invest $20k in ASX 200 shares to earn a second income of $140 a month
- BHP share price dips as coal mines catch attention
- Top brokers name 3 ASX shares to buy next week
- Why is the New Hope share price up 9% this week?
Motley Fool contributor James Mickleboro 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.
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