DCP Dividend Type Payments

Although DCP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on DCP MIDSTREAM LP to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 10:25 AM ET):

DCP MIDSTREAM LP (DCP)
Bid Ask Last Change Volume P/E Market Cap
43.62 43.71 43.62 +0.21 30K - 6.2B

DCP Dividend-Like Income Using Covered Calls

With DCP at 43.62, here's a table showing how big the annual "dividend" (ie. 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% 1.31 0.4
5% 2.18 0.6
10% 4.36 1.2

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 DCP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 45.00 0.65 33 2.0 1.29 (3.0%)
Oct 19 45.00 1.10 61 1.8 1.29 (3.0%)
5% Yield On DCP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 45.00 0.65 33 2.0 1.29 (3.0%)
Oct 19 45.00 1.10 61 1.8 1.29 (3.0%)
10% Yield On DCP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 45.00 0.65 33 2.0 1.29 (3.0%)
Oct 19 45.00 1.10 61 1.8 1.29 (3.0%)

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Top 10 Open Interest For Sep 21 Expiration     Top 5 High Yield
1.EEM dividend 6.GE dividend   1.COTY dividend
2.SPY dividend 7.GLD dividend   2.MOMO dividend
3.SPX dividend 8.FB dividend   3.LB dividend
4.QQQ dividend 9.IWM dividend   4.GPS dividend
5.XLF dividend 10.GDX dividend   5.UVXY dividend

Want more examples? DCOM Dividend | DCT Dividend