HLI Dividend
Although HLI has a dividend of 0.57 with an ex-dividend date of Mar 3, 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 Thu 4:16 PM ET):
| Houlihan Lokey, Inc. Class A (HLI) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 68.24 |
174.47 |
170.43 |
-0.31 |
329K |
33 |
12B |
HLI Dividend-Like Income Using Covered Calls
With HLI at 170.43, 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% |
5.11 |
1.4 |
| 5% |
8.52 |
2.3 |
| 10% |
17.04 |
4.7 |
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 |
| Apr 17 |
175.00 |
3.90 |
50 |
7.8 |
0.53 (0.3%) |
| Sep 19 |
175.00 |
9.80 |
205 |
4.8 |
0.53 (0.3%) |
| 5% Yield On HLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
175.00 |
3.90 |
50 |
7.8 |
0.53 (0.3%) |
| Sep 19 |
175.00 |
9.80 |
205 |
4.8 |
0.53 (0.3%) |
| 10% Yield On HLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
175.00 |
3.90 |
50 |
7.8 |
0.53 (0.3%) |
| Sep 19 |
175.00 |
9.80 |
205 |
4.8 |
0.53 (0.3%) |
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