New Hope Corp Ltd (ASX: NHC) and Woodside Energy Group Ltd (ASX: WDS) shares are both attracting plenty of interest from passive income investors.
That's because both New Hope and Woodside shares delivered all-time high interim dividends as well as all-time high final dividends. That came thanks to a surging oil price and record prices for thermal coal.
Investors may well be able to hold onto more of the record passive income the big energy companies doled out, too, as all of the dividend payments are fully franked.
So, which S&P/ASX 200 Index (ASX: XJO) share is the better passive income buy?
Let's look at some numbers.
What's fuelling the record dividend payouts from these ASX 200 stocks?
First, the low-down on the past year's passive income from Woodside shares
The ASX 200 oil and gas stock paid an interim dividend of $1.60 per share on 6 October. Woodside delivered a final dividend of $2.15 per share on 5 April. That equates to a full-year dividend payout of $3.75 per share.
At the closing bell on Friday, Woodside shares were trading for $34.73. This puts the oil and gas stock on a trailing yield of 10.81%.
As for the passive income investors have received from New Hope, the ASX 200 coal stock paid an interim dividend of 40 cents per share on 3 May. The final dividend of 56 cents per share will have landed in shareholders' bank accounts on 8 November.
That works out to a full-year payout of 96 cents per share. The New Hope share price closed Friday at $5.40. That puts the oil stock at a trailing yield of 17.78%.
So, which is the better buy?
New Hope or Woodside shares for passive income?
It's a close call, really.
Going solely by the trailing yield, New Hope shares have delivered 64% more passive income to investors than Woodside shares.
But then the trailing yield is backwards looking by definition. Future dividend payments will depend on future revenues and profits.
On share price performance you'd also have to give New Hope the lead over Woodside.
While New Hope shares are down 15% in 2023, the coal stock is up 40% over 12 months.
That compares to a lesser year to date loss of 2% for Woodside shares. However, the oil and gas stock is also down 2% over 12 months.
With all that said, I'm still going to favour Woodside shares for passive income moving forward.
That's largely based on where I believe global coal and oil prices will be trading over the next year.
I expect coal prices to remain well above historic levels (at least so long as Russia's war in Ukraine continues). But I don't foresee black gold retesting its all-time highs of 2022.
While I believe New Hope will remain highly profitable, this could see New Hope scale back its dividend payments.
Now the oil price has also come down from levels north of US$120 per barrel in June last year.
Brent crude oil is currently trading for US$75.54 per barrel.
But oil prices could well move higher over the next year.
The United States Energy Information Administration (EIA) expects the Brent crude oil price to average US$84 per barrel in 2024.
That's 11% higher than today.
If the EIA has it right, this should help support the passive income offered by Woodside shares in the year ahead.
