A 10% dividend yield! Is this ASX All Ords stock a brilliant bargain?

Is a 10% dividend yield and a 52% one-year share price gain too good to be true? I think not.

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You won't find many All Ordinaries Index (ASX: XAO) companies with a 10% dividend yield and a fast-rising share price, which is why I think this ASX All Ords stock is a brilliant bargain.

The company in question is ASX coal stock Yancoal Australia Ltd (ASX: YAL).

And for passive income investors who don't object to funding Aussie coal miners, this is one to run your slide rules over.

A juicy dividend yield AND tremendous share price growth

When you're on the hunt for passive income stocks with an exceptionally high dividend yield, you'll often run into stocks that have seen their share prices collapse in recent months. That will drive up the trailing yield, but it can also indicate that future dividends are set to take a dive as well.

Occasionally, you'll also uncover stocks that have been on a tear and still offer a market-beating dividend yield.

As for Yancoal, the ASX All Ords coal stock has rocketed 52% over the past 12 months. In fact, yesterday, shares closed at a new all-time high of $7.17.

And as for that dividend yield, Yancoal paid a fully franked interim dividend of 37 cents a share on 20 September. Passive income investors will have received the final dividend of 32.5 cents a share on 30 April.

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

At yesterday's closing price, this sees Yancoal shares trading on a fully franked trailing dividend yield of 9.69%.

What's been going right for Yancoal shares?

The Yancoal share price and dividend yield have remained resilient despite coal prices tumbling from their record highs in 2022. However, the thermal coal price has found support over the past 12 months, broadly trading in the mid-US$130 (AU$195) a tonne range.

At its March quarter report, Yancoal reported receiving an average realised price of AU$180 a tonne. That's almost double the $89 to $97 a tonne in cash operating cost the miner is targeting in 2024.

On the production side, the ASX All Ords coal stock is forecasting full-year production in the range of 35 million to 39 million tonnes.

After paying shareholders the $429 million in final dividends, Yancoal still held a very impressive $1.2 billion in cash.

I believe these strong metrics, along with strong ongoing global coal demand, should see this passive income star continue to offer a market-beating dividend yield in the year ahead.

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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