Looking for a high-yielding ASX dividend stock for $5 per share or less to earn some handy extra passive income?
Then you've come to the right place.
While there are a number of high-quality ASX shares paying fully franked dividends, not many trade for only $5 a share.
Which is why S&P/ASX 200 Index (ASX: XJO) coal share New Hope Corp Ltd (ASX: NHC) sits at the top of my list for some very attractive passive income.
We'll look at why below.
But first, keep in mind that a proper passive income portfolio won't be built around any single stock. There's no magic number, but a diversified income portfolio should hold at least 10 ASX dividend stocks operating across distinct market sectors.
This kind of diversification will decrease the risk of your passive income stream getting crunched if any particular company or sector runs into headwinds.
Also, keep in mind that the yields you generally see quoted are trailing yields. Future yields may be higher or lower depending on a range of company-specific and macroeconomic factors.
With that said…
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What's been happening with New Hope shares?
New Hope shares have only traded at or below $5 for a few weeks this year, with the longest stretch coming in July.
Shares were trading for $6.47 apiece on 20 October before coming under selling pressure amid a sliding coal price. It was only this Wednesday that the New Hope share price closed back below $5 per share before ending the day yesterday at $5.00 even.
Investor sentiment may also have taken a negative turn with the 28th United Nations climate change conference, or Cop28, ongoing in Dubai.
However, while coal is a high-emissions energy source, New Hope notes that:
Coal mined and sold by New Hope is recognised by independent experts as being one of the lowest greenhouse gas producing coals in the world.
And while the United States has pledged to phase out coal-fired power plants, China and India, the world's most populous nations, count amongst those that continue to construct new coal-fired electricity plants.
With coal demand expected to increase in China over the coming winter months, and the nation having lifted its punitive ban on Aussie coal imports, I think now could be an opportune time to buy the ASX 200 coal miner at just $5.00 a share for some attractive passive income.
Mining New Hope shares for passive income at just $5.00 per share
Now, let's dig into the numbers.
Over the past 12 months New Hope paid out a fully franked interim dividend of 40 cents per share on 3 May.
The ASX 200 coal stock paid the final dividend of 30 cents per share on 7 November. That equates to a full year's dividend payout out of 70 cents per share.
At yesterday's closing price of $5.00 per share, that works out to a fully franked trailing yield of 14.0%.
Meaning a $10,000 investment today could see me earn $1,400 of annual passive income, with potential tax benefits from those franking credits.
I don't know about you, but I'd say that's some very attractive passive income.
