CIVI Dividend
Although CIVI has a dividend of 0.50 with an ex-dividend date of Mar 14, you can sell covered calls on Civitas Resources, Inc. to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):
| Civitas Resources, Inc. (CIVI) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 37.51 |
39.19 |
38.34 |
0.00 |
2.5M |
4.5 |
3.6B |
CIVI Dividend-Like Income Using Covered Calls
With CIVI at 38.34, here's a table showing how big the annual "dividend" (i.e. total annual call premium received) would need to be to attain 3%, 5%, and 10% annual yields. Also shown is the equivalent number of cents/day necessary to achieve each yield:
| Annual Yield |
Annual Premium |
Cents/Day |
| 3% |
1.15 |
0.3 |
| 5% |
1.92 |
0.5 |
| 10% |
3.83 |
1.1 |
So now we need to find out of the money covered calls that pay at least the prescribed cents/day amount of time premium. That will generate income and, because they are out of the money, leave room for some upside potential on the stock. Here are some examples:
| 3% Yield On CIVI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
40.00 |
1.30 |
49 |
2.7 |
0.81 (2.1%) |
| Oct 17 |
40.00 |
3.10 |
232 |
1.3 |
0.81 (2.1%) |
| 5% Yield On CIVI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
40.00 |
1.30 |
49 |
2.7 |
0.81 (2.1%) |
| Oct 17 |
40.00 |
3.10 |
232 |
1.3 |
0.81 (2.1%) |
| 10% Yield On CIVI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
40.00 |
1.30 |
49 |
2.7 |
0.81 (2.1%) |
| Oct 17 |
40.00 |
3.10 |
232 |
1.3 |
0.81 (2.1%) |
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