DHC Dividend Type Payments

Although DHC has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Diversified Healthcare Trust - Common Shares of Beneficial Interest 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):

Diversified Healthcare Trust - Common Shares of Beneficial Interest (DHC)
Bid Ask Last Change Volume P/E Market Cap
2.56 2.68 2.64 +0.07 730K - 0.6B

DHC Dividend-Like Income Using Covered Calls

With DHC at 2.64, 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% 0.08 0.0
5% 0.13 0.0
10% 0.26 0.1

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 DHC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 16 3.00 0.15 309 0.0 0.32 (12.1%)
5% Yield On DHC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 16 3.00 0.15 309 0.0 0.32 (12.1%)
10% Yield On DHC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 16 3.50 0.25 309 0.1 0.82 (31.1%)

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