EXP Dividend

Eagle Materials, Inc dividend

Although EXP has a dividend of 0.10 with an ex-dividend date of Apr 11, you can sell covered calls on Eagle Materials, Inc to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):

Eagle Materials, Inc (EXP)
Bid Ask Last Change Volume P/E Market Cap
70.67 73.70 72.79 +0.54 664K 15 3.3B

EXP Dividend-Like Income Using Covered Calls

With EXP at 72.79, 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% 2.18 0.6
5% 3.64 1.0
10% 7.28 2.0

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 EXP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 80.00 0.20 32 0.6 6.30 (8.7%)
Jul 19 85.00 0.95 124 0.8 11.30 (15.5%)
5% Yield On EXP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 77.50 0.35 32 1.1 3.80 (5.2%)
Jul 19 82.50 1.45 124 1.2 8.80 (12.1%)
10% Yield On EXP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 75.00 1.30 32 4.1 1.30 (1.8%)
Jul 19 77.50 2.85 124 2.3 3.80 (5.2%)

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