LI Dividend Type Payments
Although LI has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Li Auto Inc. - American Depositary Shares to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 11:30 AM ET):
| Li Auto Inc. - American Depositary Shares (LI) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 27.92 |
27.93 |
27.93 |
+0.72 |
2.1M |
49 |
0.0B |
LI Dividend-Like Income Using Covered Calls
With LI at 27.93, 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% |
0.84 |
0.2 |
| 5% |
1.40 |
0.4 |
| 10% |
2.79 |
0.8 |
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 LI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 1 |
28.00 |
1.21 |
22 |
5.5 |
0.07 (0.3%) |
| Aug 8 |
28.00 |
1.38 |
29 |
4.8 |
0.07 (0.3%) |
| 5% Yield On LI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 1 |
28.00 |
1.21 |
22 |
5.5 |
0.07 (0.3%) |
| Aug 8 |
28.00 |
1.38 |
29 |
4.8 |
0.07 (0.3%) |
| 10% Yield On LI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 1 |
28.00 |
1.21 |
22 |
5.5 |
0.07 (0.3%) |
| Aug 8 |
28.00 |
1.38 |
29 |
4.8 |
0.07 (0.3%) |
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