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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