HRI Dividend Type Payments
Although HRI has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Herc Holdings Inc. to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 3:05 PM ET):
| Herc Holdings Inc. (HRI) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 136.86 |
137.30 |
137.26 |
-4.79 |
131K |
- |
4.7B |
HRI Dividend-Like Income Using Covered Calls
With HRI at 137.26, 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% |
4.12 |
1.1 |
| 5% |
6.86 |
1.9 |
| 10% |
13.73 |
3.8 |
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 HRI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
140.00 |
9.40 |
47 |
20.0 |
2.70 (2.0%) |
| Nov 21 |
140.00 |
5.00 |
19 |
26.3 |
2.70 (2.0%) |
| 5% Yield On HRI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
140.00 |
9.40 |
47 |
20.0 |
2.70 (2.0%) |
| Nov 21 |
140.00 |
5.00 |
19 |
26.3 |
2.70 (2.0%) |
| 10% Yield On HRI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
140.00 |
9.40 |
47 |
20.0 |
2.70 (2.0%) |
| Nov 21 |
140.00 |
5.00 |
19 |
26.3 |
2.70 (2.0%) |
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