At the height of the energy panic in October last year, Whitehaven Coal Ltd (ASX: WHC) shares were close to the $11 mark.
And it looked the goods at the time, with the embargo against Russian imports forcing European countries to scramble to mitigate their energy shortfall before the bitter northern winter.
However, that actually proved to be the peak, with the stock now trading more than 35.5% below that level.
So Whitehaven shares, on face value, look pretty cheap. But are its future prospects good enough to buy?
Why have coal shares plunged, and will they recover?
ASX coal shares have taken a hammering this year simply because the global price for the commodity has tumbled.
"Since COVID, the coal price has been on a rollercoaster ride, with the last 12 months ~70% decline taking prices back down to more sustainable levels," Shaw and Partners portfolio manager James Gerrish told Market Matters this week.
Notwithstanding this price plunge, unfortunately for global warming, the world is going to need coal for a while longer.
"We continue to believe that the transition to clean energy will be a more challenging and longer journey than we all hope, benefiting the coal stocks, which are already cheap cash cows at current prices."
Whitehaven shares offer both dividend income and capital growth
Gerrish pointed out how Whitehaven shares are a prototypical example of this, currently trading at price-to-earnings (P/E) ratio of just 8 while boasting a forecast dividend yield in excess of 6%.
The current dividend yield stands at a whopping 10.6% fully franked.
"We continue to like Whitehaven Coal for growth… Market Matters is bullish on coal stocks through 2024/5."
Indeed Gerrish's researchers aren't the only ones keen on Whitehaven to rake in both capital growth and dividends.
CMC Markets currently shows six out of 12 analysts that cover the coal stock rating it as a buy.
The Whitehaven share price has gained more than 62% over the past five years.
