Only a handful of S&P/ASX 200 Index (ASX: XJO) dividend stocks offer yields north of 10%.
And when you get into the lofty 13% range, those numbers dwindle even further.
Now, I wouldn't snap up just any high-yielding ASX 200 dividend stock to build up my passive income stream.
First, I want to feel comfortable that the company is going to continue paying market-beating yields in the year ahead.
I'd also strongly preference companies paying fully franked dividends. That way, I should be able to hold onto more of that passive income at tax time.
With that said, we turn to coal share New Hope Corp Ltd (ASX: NHC).
Why I'd snap up New Hope shares for passive income
On the back of elevated coal prices, New Hope has been a leading yielder among ASX 200 dividend stocks in both 2022 and 2023.
Despite coal prices and New Hope's dividends coming down in 2023, the miner still paid a fully franked interim dividend of 40 cents per share on 3 May. New Hope paid eligible investors the final dividend of 30 cents per share on 7 November. That equates to a full-year payout of 70 cents per share.
New Hope's recent share price of $5.33 sees this ASX 200 dividend stock trading at a fully franked yield of 13.1%.
Can the ASX 200 dividend stock maintain this high yield?
The 13.1% yield we calculated above, and the dividend 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.
For New Hope, the coal price is obviously key. But with thermal coal prices already down some 50% over the past year, I believe 2024 should see prices stabilise or even tick up from here.
And if the New Hope share price rises over the coming months, its trailing yield will fall. However, the realised yield for investors who buy in at today's prices won't be impacted.
As for why I remain optimistic about the outlook for passive income for this ASX 200 dividend stock, we turn to the miner's most recent quarterly update, which covered the three months to 31 October.
Over the quarter New Hope produced two million tonnes of saleable coal. That was up 1% from the prior quarter, and it puts the company on track to meet its FY 2024 guidance.
Impacted by the slumping coal price, New Hope's underlying earnings before interest, taxes, depreciation and amortisation (EBITDA) dropped 8.5% quarter on quarter to $245 million.
But the company's balance sheet remains very strong.
New Hope reported closing cash and cash equivalents of $812 million. That was before paying out the final dividends.
And the ASX 200 dividend stock is getting a boost from higher interest rates. New Hope said it was "now earning material net interest income on its positive cash balances".
That leaves the miner well-funded to finance a range of maintenance and infrastructure projects to support its future planned production ramp-up.
