Being able to invest in S&P/ASX 200 Index (ASX: XJO) shares for passive income with the benefit of hindsight would be a great thing.
Obviously.
But with the New Hope Corporation Limited (ASX: NHC) share price and dividend payouts having rocketed over the past year amid soaring coal prices, I thought we'd look at just how much passive income a $1,000 investment in the coal stock two years ago would have delivered.
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How much passive income has this ASX 200 share delivered?
Two years ago, New Hope was trading for $1.34 per share.
That means your $1,000 investment would have bought you 746 shares, leaving you with enough loose change in your pocket for a stick of gum.
Now, after buying the stock, and chewing that gum, you just sit back and forget about it.
Until today.
That's when you run the figures which show this ASX 200 share paid the following fully franked dividends:
- Interim dividend of 4 cents per share on 5 May 2021
- Final dividend of 7 cents per share on 9 November 2021
- Interim dividend of 30 cents per share on 14 April 2022
- Final dividend of 56 cents per share on 8 November 2022
- Interim (plus special) dividend of 40 cents per share (payable on 3 May 2023)
And remember, all these come with franking benefits. Meaning you'll get credit for the 30% corporate taxes already paid on the company's profits.
Leaving the franking benefits aside, as those will vary depending on your other tax obligations, this ASX 200 share has paid out – or declared – $1.37 per share in dividends over the past two years.
Now I say "or declared" because New Hope's latest interim dividend was only declared yesterday. If you'd bought shares two years ago you'd still need to own them at market close on 17 April. That's when this ASX 200 share trades ex-dividend.
Assuming you're happy to hold on for that payout, your $1,000 investment in New Hope will have delivered $1,022.02 in passive income in two years.
That's right.
From the passive income stream alone you've already made back your original investment. Plus enough for an entire pack of gum!
New Hope share price gains
But let's not forget the share price.
Atop the big payoff in passive income from this ASX 200 share, you'd also have invested in a stock that returned some outsized capital gains.
I told you investing with hindsight is a wonderful thing.
At the time of writing the New Hope share price is trading at $5.64.
Meaning your 746 shares, bought for $1,000 two years ago, are currently worth $4,073.16.
All from that initial $1,000 set and forget ASX 200 share investment.
