HLI Dividend
Although HLI has a dividend of 0.57 with an ex-dividend date of Dec 2, you can sell covered calls on Houlihan Lokey, Inc. Class A 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):
| Houlihan Lokey, Inc. Class A (HLI) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 180.25 |
188.48 |
184.12 |
+0.04 |
243K |
38 |
13B |
HLI Dividend-Like Income Using Covered Calls
With HLI at 184.12, 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% |
5.52 |
1.5 |
| 5% |
9.21 |
2.5 |
| 10% |
18.41 |
5.0 |
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 HLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
190.00 |
1.00 |
36 |
2.8 |
1.52 (0.8%) |
| Jan 17 |
190.00 |
2.50 |
64 |
3.9 |
1.52 (0.8%) |
| 5% Yield On HLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
190.00 |
1.00 |
36 |
2.8 |
1.52 (0.8%) |
| Jan 17 |
190.00 |
2.50 |
64 |
3.9 |
1.52 (0.8%) |
| 10% Yield On HLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Mar 21 |
190.00 |
6.50 |
127 |
5.1 |
1.52 (0.8%) |
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