Coal shares you are recommending WHC what are your thoughts on NHC?
Also what do you think best value BHP or RIO?
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Answer
Hi Barbara,
In the coal space we like and hold Whitehaven Coal (WHC) in our Active Growth Portfolio, whereas we like and hold New Hope (NHC) for yield in our Active Income Portfolio – unfortunately neither have enjoyed a good year:
The differential between the two comes because WHC is no longer the cash cow it once was after the acquisition of the Daunia and Blackwater metallurgical coal mines from BHP Mitsubishi Alliance (BMA) for a total of $3.2 billion. This marks a significant step for WHC, transforming it into a major metallurgical coal producer with a focus on Queensland’s Bowen Basin but its now only forecast to yield 3.3% over the next 12-months compared to ~10% for NHC.
Our portfolios are also the giveaway with regard to BHP and RIO, we hold “The Big Australian” (BHP) in both our Active Growth and Income Portfolios but for now they are both tracking the fortunes of iron ore & China closely with both weighing performance through 2024, i.e. we prefer BHP over RIO at current prices primarily because it has successfully diversified further away from the bulk commodity.
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Whitehaven Coal (WHC) v New Hope Corp (NHC)
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Whitehaven Coal (WHC) v New Hope Corp (NHC)
