My top ASX dividend pick for 2024 is a passive income powerhouse

There are a lot of quality ASX dividend stocks, but this passive income star tops my list.

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Investing in ASX dividend shares and looking for a true passive income powerhouse?

While there are a lot of quality ASX dividend stocks we could look at, one high-yielding gem tops my list.

Namely, ASX coal stock Yancoal Australia Ltd (ASX: YAL).

Not only does Yancoal pay market beating passive income, but the company's share price has held up remarkably well despite a sharp retreat in coal prices since their all-time highs in 2022.

As you can see on the chart below, the past six months have been particularly pleasing, with the Yancoal share price up more than 17%. That's well ahead of the 11% gains posted by the All Ordinaries Index (ASX: XAO) over this same period.

So, what about that passive income?

My top 2024 ASX passive income pick

Although Yancoal's eye-popping dividend payouts have come down over the past year, they still lead the market.

Yancoal paid a fully franked interim dividend of 37 cents per share on 20 September. The coal miner's final dividend of 32.5 cents was just paid this past Tuesday, 30 April.

That equates to a full-year passive income payout of 69.5 cents per share.

At the recent Yancoal share price of $5.60, this works out to a fully franked trailing yield of 12.4%.

Now, while some high-yielding ASX dividend stocks can be 'dividend traps', I don't think that's the case for Yancoal.

Why?

Let's have a look at the coal miner's latest quarterly results for the three months ending 31 March.

$1.7 billion in cash

Yancoal reported its quarterly results on 18 April, and these reinforced my confidence the company is likely to remain a passive income powerhouse in the year or years ahead.

Over the three months, the miner reported 14.0 million tonnes run of mine (ROM) coal production with 11.3 million tonnes of saleable coal production.

Yancoal received an average realised coal price of AU$180 per tonne.

The overall realised coal price was down 8% from 4Q 2023, with a 12% decline in the company's realised thermal coal price partly offset by a 14% increase in its realised metallurgical coal price.

Despite the lower coal prices, Yancoal increased its cash holdings by $260 million over the quarter. That saw the miner with a $1.66 billion cash balance as at 31 March.

"Yancoal continues to generate robust cash inflows. The AU$180 a tonne price realised was roughly double the cash operating cost we are targeting this year," Yancoal CEO David Moult said of the results.

Yancoal's 2024 production guidance remained unchanged at:

  • 35-39 million tonnes attributable saleable coal production
  • $89 to $97 per tonne cash operating costs
  • $650 million to $800 million attributable capital expenditure

As always, whether you're looking at buying Yancoal or any other ASX dividend shares for passive income, make sure to do your own research first. Or simply reach out for some expert advice.

Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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