New Hope shares have soared 152% in 2022. Is it time to cash in?

Even after this year's huge share price rally, New Hope still pays a trailing dividend yield of 15%, fully franked.

Key points
  • New Hope shares have gained 152% this calendar year
  • Some analysts believe weakening coal prices could mean the ASX 200 coal share is near its peak
  • New Hope reported a 167% quarterly leap in underlying EBITDA last week

New Hope Corporation Limited (ASX: NHC) shares are charging higher today.

Again.

In early afternoon trade, the S&P/ASX 200 Index (ASX: XJO) coal stock is up 5%.

That puts New Hope shares up an eye-popping 152% since the closing bell on 31 January.

And that doesn't include the four lots of fully franked dividends paid out this year. Even at the current share price of $5.66, New Hope still pays a trailing dividend yield of 15.2%.

ASX 200 investors who bought shares early in the year, will have realised far higher yields.

So, with those kinds of gains already in the bag, is it time to take some profits?

a man with a hard hat and high visibility vest stands with a clipboard and pen in front of a large pile of rock at a mining site.

Image source: Getty Images

Is it time to cash in on New Hope shares?

The answer to that question depends on who you ask.

John Athanasiou, the founder of Red Leaf Securities, is in the take some profit camp.

According to Athanasiou (courtesy of The Bull), "It's been a bumper year for the coal sector. However, weaker coal prices recently and possibly in the future causes us concern."

Noting the meteoric rise in New Hope shares this calendar year, Athanasiou said, "Investors may want to consider cashing in some gains and look for opportunities elsewhere."

Sounding off for the more bullish side are the analysts over at Macquarie.

Following the coal miner's quarterly update last week, Macquarie retained its outperform rating for New Hope shares. While the broker did reduce its price target to $6.40, that's still 13% above the current share price.

Pointing to strong thermal coal prices, Macquarie believes New Hope will continue to be a strong dividend payer.

Just how profitable is this ASX 200 coal stock?

In its quarterly update last Thursday, New Hope revealed that underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) leapt 167% to reach $648 million.

That came despite wet weather and labour issues seeing production fall 10% quarter on quarter.

Investors may be concerned about that production slide, with New Hope shares down 4% since the miner released that update.

Motley Fool contributor Bernd Struben 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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