BKH Dividend

Black Hills Corporation dividend

Although BKH has a dividend of 0.68 with an ex-dividend date of Feb 18, you can sell covered calls on Black Hills Corporation to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 12:45 PM ET):

Black Hills Corporation (BKH)
Bid Ask Last Change Volume P/E Market Cap
59.71 59.76 59.73 +0.56 91K 16 4.2B

BKH Dividend-Like Income Using Covered Calls

With BKH at 59.73, 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% 1.79 0.5
5% 2.99 0.8
10% 5.97 1.6

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 BKH Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 60.00 1.15 192 0.6 0.24 (0.4%)
May 16 60.00 2.05 101 2.0 0.24 (0.4%)
5% Yield On BKH Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 16 60.00 2.05 101 2.0 0.24 (0.4%)
Feb 21 60.00 0.60 17 3.5 0.24 (0.4%)
10% Yield On BKH Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 16 60.00 2.05 101 2.0 0.24 (0.4%)
Feb 21 60.00 0.60 17 3.5 0.24 (0.4%)

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