This year has been a very volatile time for investors. But would a portfolio of S&P/ASX 200 Index (ASX: XJO) high-yield dividend shares have been a way to cushion the blow of share market declines?
Sometimes a high dividend yield can be a trap. The last 12 months of dividends may have been high, but could it signal that a cut is coming in the next 12 months? Sometimes it does.
A high dividend yield can also be achieved if an ASX share has a particularly low price/earnings (p/e) ratio and/or a particularly high dividend payout ratio.
Let's go back in time to the beginning of the 2022 calendar year and look at some of the highest-yielding ASX 200 dividend shares and see how they performed in total return terms. That's the dividend return plus the share price return.
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New Hope Corporation Limited (ASX: NHC)
The coal miner has been on an amazing run this year. The New Hope share price has risen by around 190% in 2022. It has benefited enormously from the big increase in the coal price as the world has sought energy sources away from Russia.
New Hope is supplying coal to a number of countries, sending its net profit after tax (NPAT) soaring. This, in turn, has enabled it to pay very large dividends. We saw this in the company's FY22 result.
In 2022, it has also declared total dividends of 86 cents per share. Using the New Hope share price at the start of the year, that dividend equates to a dividend yield of 38.5% excluding franking credits.
This means that the total return from New Hope has been approximately 230% in 2022.
Magellan Financial Group Ltd (ASX: MFG)
It has been a rough time for the fund manager Magellan. It may have entered the year with a large dividend, but investors have not benefited.
As at market close on Tuesday, the Magellan share price has fallen by 47% in 2022 so far. Ouch.
Not only have inflation and higher interest rates hurt Magellan's portfolios, but the fund manager has also seen investors pull out many billions of dollars. This reduces profitability and has led to analysts expecting that more FUM will be withdrawn.
At 31 December 2021, Magellan had $95.5 billion of FUM. By 30 September 2022, the FUM had fallen to just $50.9 billion.
The total dividend was reduced by 15% to $1.79 per share. Using the Magellan share price at the start of the year, that translates to a dividend yield of 9.5%, excluding franking credits. That puts the total return at minus 37.5%.
Fortescue Metals Group Limited (ASX: FMG)
Fortescue is one of Australia's largest miners. Investor sentiment about the business often moves with the iron ore price, which has been reducing in recent months.
So, while the Fortescue share price has been higher than the current price several times over 2022, it is currently down 18% for the year with elevated uncertainty about the Chinese — and global — economy.
However, Fortescue is known as a big ASX 200 dividend share. On that front, it has still paid big money to shareholders this year, totalling 12.7% in yield terms, excluding franking credits.
Fortescue's total shareholder return was approximately minus 5%.
Foolish takeaway
I think the above returns go to show that it has been a mixed bag for high-yielding ASX 200 dividend shares this year. Coal has been the clear winner, so New Hope can take a bow.
