ARLP Dividend Type Payments

Alliance Resource Partners, L.P. - Common Units Representing Limited Par dividend

Although ARLP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Alliance Resource Partners, L.P. - Common Units Representing Limited Par 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):

Alliance Resource Partners, L.P. - Common Units Representing Limited Par (ARLP)
Bid Ask Last Change Volume P/E Market Cap
25.90 27.00 26.58 -0.04 125K 13 3.4B

ARLP Dividend-Like Income Using Covered Calls

With ARLP at 26.58, 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% 0.80 0.2
5% 1.33 0.4
10% 2.66 0.7

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 ARLP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 27.50 0.40 44 0.9 0.50 (1.9%)
Sep 19 27.50 0.60 79 0.8 0.50 (1.9%)
5% Yield On ARLP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 27.50 0.40 44 0.9 0.50 (1.9%)
Sep 19 27.50 0.60 79 0.8 0.50 (1.9%)
10% Yield On ARLP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 27.50 0.40 44 0.9 0.50 (1.9%)
Sep 19 27.50 0.60 79 0.8 0.50 (1.9%)

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