EE Dividend

El Paso Electric Co dividend

Although EE has a dividend of 0.36 with an ex-dividend date of Mar 14, you can sell covered calls on El Paso Electric Co to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):

El Paso Electric Co (EE)
Bid Ask Last Change Volume P/E Market Cap
52.00 53.39 53.38 +0.94 195K 20 2.1B

EE Dividend-Like Income Using Covered Calls

With EE at 53.38, 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% 1.60 0.4
5% 2.67 0.7
10% 5.34 1.5

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 EE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 55.00 0.40 29 1.4 1.61 (3.0%)
Jun 21 55.00 1.35 127 1.1 1.61 (3.0%)
5% Yield On EE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 55.00 0.40 29 1.4 1.61 (3.0%)
Jun 21 55.00 1.35 127 1.1 1.61 (3.0%)

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Want more examples? EDZ Dividend | EEB Dividend