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 Wed 4:16 PM ET):
| Diversified Healthcare Trust - Common Shares of Beneficial Interest (DHC) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 4.79 |
4.86 |
4.81 |
+0.05 |
626K |
- |
1.2B |
DHC Dividend-Like Income Using Covered Calls
With DHC at 4.81, 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% |
0.14 |
0.0 |
| 5% |
0.24 |
0.1 |
| 10% |
0.48 |
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 |
5.00 |
0.15 |
45 |
0.3 |
0.14 (2.9%) |
| Dec 18 |
5.00 |
0.60 |
381 |
0.2 |
0.14 (2.9%) |
| 5% Yield On DHC Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 16 |
5.00 |
0.15 |
45 |
0.3 |
0.14 (2.9%) |
| Dec 18 |
5.00 |
0.60 |
381 |
0.2 |
0.14 (2.9%) |
| 10% Yield On DHC Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 16 |
5.00 |
0.15 |
45 |
0.3 |
0.14 (2.9%) |
| Dec 18 |
5.00 |
0.60 |
381 |
0.2 |
0.14 (2.9%) |
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