It's safe to say that passive income-focused investors are spoilt down under. The S&P/ASX 200 Index (ASX: XJO) – home to many of Australia's most influential companies – also houses dozens of dividend-paying shares.
In fact, 84% of ASX 200 companies that released earnings in the August 2022 reporting season paid a dividend, according to CommSec data.
But there's one stock I would pay particular attention to if I were seeking $1,000 of annual passive income for a relatively small weekly investment.
Image source: Getty Images
The ASX 200 coal share boasting an 11% dividend yield
Recently minted ASX 200 share Coronado Global Resources Inc (ASX: CRN) has likely pricked the ears of income investors over the last 12 months.
The metallurgical coal producer's profits rocketed a huge 685% year-on-year in the first half of 2022, reaching US$562 million. Meanwhile, its average realised coal price surged 193% to US$292.80 a tonne amid soaring demand for the black rock.
Such whopping profits saw the ASX 200 share payout two ordinary dividends and three special dividends – worth a grand total of 59.75 cents.
Of course, one can't bank on special dividends in the future. So, the company's ordinary offerings came in at a combined 23.05 cents last year.
And its payouts have been tipped to grow in the coming years.
How I'd aim for $1,000 of passive income with $97 a week
Analyst consensus forecasts Coronado to pay 24.1 cents per share next financial year, as my Fool colleague James reports.
At that rate, an investor would need to buy 4150 shares in the ASX 200 coal miner to bank $1,000 of passive income annually.
Such a parcel would set them back $8,756.50 at the stock's current share price of $2.11.
Now, it's unlikely I could afford to invest such a hefty sum right away. Fortunately, it doesn't all need to be invested in a single transaction.
Instead, I'd likely aim to invest $97 a week in the ASX 200 share, thereby reaching my targeted stake by October 2024 if I started today.
More optimistically, Bell Potter predicts Coronado will pay out 45.5 cents per share in financial year 2024.
At that rate, I would only need 2,198 shares – worth $4,638 – to receive $1,000 of annual passive income next fiscal year. Such a stake would likely take me just under a year to build if I invested $97 a week.
No doubt the share price will move in that time. However, sticking to my weekly plan should help mitigate any ups and downs.
Risk versus reward
Like most mining stocks, Coronado's earnings are largely dependent on commodity prices. Thus, the company doesn't have all that much control over its future profits and, in turn, its dividends.
For that reason, I'd argue it carries more risk than some other shares on the ASX 200.
And, of course, no investment can be guaranteed to provide returns, be they passive income or share price gains. Additionally, past performance doesn't guarantee future performance.
