Why is the New Hope share price up 9% this week?

What a great week it’s been for the New Hope Corporation Limited (ASX: NHC) share price.

The ASX 200 coal share is up 9% after dropping a great set of results for 1H FY23 earlier in the week.

This compares to a 0.2% bump for the S&P/ASX 200 Index (ASX: XJO) this week.

The miner doubled its profits and seriously upsized its dividend by 76% to a new record level.

As my colleague Bernd points out, New Hope is now paying a dividend yield of 17.6%.

That’s nuts.

The coal miner will pay an interim dividend of 30 cents per share fully franked. It will also pay a special dividend of 10 cents per share fully franked.

If you’re not currently an investor and you want a piece of those divvies, you’ll have to buy New Hope shares before the ex-dividend date.

But that’s not til 17 April.

So, if that’s your strategy, maybe it’s worth waiting to see if the New Hope share price drops back a bit following all this market exuberance this week.

By the way, that river of black gold dividends won’t be stopping there, if broker Morgans has it right.

The broker forecasts a fully franked annual dividend of $1 per share in FY23. That’s another massive 18% payout based on the current share price. It forecasts a 90-cent dividend in FY24, which is a 16% yield.

Case closed: New Hope ends the week on a high

The New Hope share price may be slightly in the red today, down 0.35%, but the company is ending the week on a positive note.

New Hope released an update today in relation to legal proceedings brought against it by the liquidators of its subsidiary companies Northern Energy Corporation (NEC) and Colton Coal.

The Supreme Court of NSW dismissed the case after the parties agreed to a settlement.

The deal will cost New Hope $38.5 million.

The company said:

Consistent with the provision raised by the Company and outlined in the Financial Statements for the half year ended 31 January 2023, the economic outflow from the Group arising from the settlement is A$38.5 million.

New Hope has denied any wrongdoing in previous statements on the matter.

What was that all about?

To recap, NEC and Colton Coal were subsidiaries of New Hope. They were placed into voluntary administration in October 2018. Creditors then appointed liquidators in July 2019.

The liquidators investigated whether there were any potential claims to be made against New Hope or the former directors and officers of the subsidiary businesses. They reportedly looked into alleged voidable transactions, insolvent trading, asset transfers, and breaches of directors’ duties.

In a statement back in March 2021, New Hope said that according to media reports that day, the liquidators had estimated the value of the claims at $174.1 million plus interest and costs.

The post Why is the New Hope share price up 9% this week? appeared first on The Motley Fool Australia.

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Motley Fool contributor Bronwyn Allen 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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