HESM Dividend
Although HESM has a dividend of 0.74 with an ex-dividend date of Aug 7, you can sell covered calls on Hess Midstream LP Class A Representing Limited Partner Interests 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):
| Hess Midstream LP Class A Representing Limited Partner Interests (HESM) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 41.70 |
42.15 |
41.79 |
-0.18 |
1.9M |
17 |
4.9B |
HESM Dividend-Like Income Using Covered Calls
With HESM at 41.79, 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% |
1.25 |
0.3 |
| 5% |
2.09 |
0.6 |
| 10% |
4.18 |
1.1 |
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 HESM Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 19 |
42.00 |
0.60 |
45 |
1.0 |
0.00 (0.0%) |
| Nov 21 |
42.00 |
1.40 |
108 |
1.2 |
0.00 (0.0%) |
| 5% Yield On HESM Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 19 |
42.00 |
0.60 |
45 |
1.0 |
0.00 (0.0%) |
| Nov 21 |
42.00 |
1.40 |
108 |
1.2 |
0.00 (0.0%) |
| 10% Yield On HESM Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Nov 21 |
42.00 |
1.40 |
108 |
1.2 |
0.00 (0.0%) |
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