With coal prices at record levels this year, a number of miners of the black gold are printing money. And lots of it! In light of this, the market is expecting some big dividends from coal miners.
One of those is ASX 200 coal miner Coronado Global Resources Inc (ASX: CRN).
What is expected from the Coronado Global dividend?
While miners are known for providing big dividend yields when times are good, the Coronado Global dividend could be one of the largest you’ll ever see.
That’s the view of the team at Goldman Sachs, which are expecting mouth-watering yields from the coal miner’s shares in FY 2022 and FY 2023.
According to the note, the broker has a buy rating and $2.15 price target on the company’s shares.
Based on the current Coronado Global share price of $1.43, this implies potential upside of 50% for investors over the next 12 months. And that’s before dividends.
A 50% yield?
Goldman has pencilled in dividends per share of 53 US cents in FY 2022 and then 30 US cents in FY 2023. This currently equates to 76.5 Australian cents and 43.3 Australian cents, respectively.
So, with the Coronado Global share price trading at $1.43, Goldman is forecasting staggering dividend yields of 53.4% in FY 2022 and 30.3% in FY 2023.
The broker expects this to be underpinned by very strong free cash flow generation thanks to sky high coal prices. It forecasts a “2022/23E FCF yield of c.60%/30% (c.50%/35% at spot) driven by our supportive view on met coal and also pricing lags, but also an expected operational turnaround over the medium term.”
All in all, thanks to this and its “compelling valuation”, Goldman Sachs believes Coronado Global shares could be a top option for investors that are looking for dividends and aren’t averse to investing in the resources sector.