ECOL Dividend

US ECOLOGY dividend

Although ECOL has a dividend of 0.18 with an ex-dividend date of Oct 18, you can sell covered calls on US ECOLOGY to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 1:25 PM ET):

US ECOLOGY (ECOL)
Bid Ask Last Change Volume P/E Market Cap
65.10 65.45 65.19 -0.17 27K 23 1.4B

ECOL Dividend-Like Income Using Covered Calls

With ECOL at 65.19, 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% 1.96 0.5
5% 3.26 0.9
10% 6.52 1.8

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 ECOL Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 75.00 0.20 33 0.6 9.55 (14.6%)
Dec 21 75.00 0.45 68 0.7 9.55 (14.6%)
5% Yield On ECOL Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 70.00 0.90 33 2.7 4.55 (7.0%)
Dec 21 70.00 1.40 68 2.1 4.55 (7.0%)
10% Yield On ECOL Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 70.00 0.90 33 2.7 4.55 (7.0%)
Dec 21 70.00 1.40 68 2.1 4.55 (7.0%)

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