Looking for passive income to beat the ASX?
While there are a number of high-yielding ASX dividend shares you may wish to investigate, one stands out as a true cash gusher.
The passive income star I'm talking about is ASX coal stock Yancoal Australia Ltd (ASX: YAL).
Beat the ASX with this cash-generating energy stock
Yancoal leapt onto many income investors' radars in 2022 and early 2023. That's when record thermal coal prices drove record profits and sky-high fully franked dividends that truly beat the ASX.
Now, those dividends have come down in the second half of 2023 and the first half of 2024 as coal prices returned to earth.
But with coal prices remaining elevated by historic standards, this passive income stock is still a cash gusher. And with global coal demand forecast to remain resilient as China, India and Indonesia, among others, continue to build new coal-fired power plants, I believe Yancoal's dividends will continue to beat the ASX.
As for the last two dividends, the ASX coal share paid a fully franked interim dividend of 37 cents per share on 20 September.
The final dividend of 32.5 cents per share, also fully franked, will land in eligible investors' bank accounts on 30 April. If you owned shares on 11 March, keep an eye out for that one. Yancoal shares traded ex-dividend on 12 March.
All up then, this ASX dividend gem paid (or shortly will pay) a total of 69.5 cents per share over the past 12 months.
The Yancoal share price hasn't beaten the ASX so far this year. But it's back in the green for 2024, up just over 1% at $5.25 a share.
That equates to a fully franked trailing yield of 13.2%.
A peak under Yancoal's hood
To get an idea of how this cash-gushing coal stock is one to beat the ASX, we turn to the company's full-year 2023 results.
As mentioned, coal prices fell significantly over the year. And Yancoal reported a 39% decrease in realised coal price to $232 per tonne.
While that resulted in a 25% decline in revenue, full-year revenue still came in at $7.8 billion, supported by a 14% increase in attributable saleable coal production.
And management noted that 2023 earnings before interest, taxes, depreciation and amortisation (EBITDA) of $3.5 billion and an EBITDA margin of 45% "demonstrated the quality of Yancoal's assets in the face of retreating coal prices".
As for the balance sheet, this ASX beating dividend stock had a cash balance at the end of 2023 of $1.4 billion.
