henry,
You likely need to provide more information than you did for some of the avid handi rifle shooters to provide help. Some of the basics may include.
* If the scope has an adjustable objective,is it being dialed in properly for the yardage?
* What size 3 or 5 shot groups do you average at 100 yards?
* What distance is the rifle zeroed at?
* What grain ammo or loads are you shooting?
* What position did you shoot at the coyotes from,sitting w) sticks,sitting,kneeling,off hand?
* Are you familar with your cold bore shot placement and what cleaning or non cleaning methods keep the gun in the groove?
Most of the guys shooting Handi .223 calibers are reporting an average 5 shot of about M.O.A. Many whom hunt .223's zero for 200 yards. Many tweak the forearm action screw for tightest groups and mark it. IMO, it is a must to know what your cold bore p.o.i. is for coyote and woodchuck hunting and know how to keep it in the groove for that. Many handi's (at least my Hornet) prefer to shoot from a dirty bore. I have a home 50 yard range and practice offhand with rimfires. To stay in the groove shooting off hand for field use, I need to fire at least 5-10 shots per week from that position. If you don't practice that position and shot at the coyotes from off hand or even sitting with out shooting sticks. You may have just plain missed.
W.S. / Bill