HCSG Dividend

HEALTH CARE SERVICES GROUP dividend

Although HCSG has a dividend of 0.20 with an ex-dividend date of Nov 21, you can sell covered calls on HEALTH CARE SERVICES GROUP 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):

HEALTH CARE SERVICES GROUP (HCSG)
Bid Ask Last Change Volume P/E Market Cap
37.80 42.04 41.82 0.00 760K 45 3.1B

HCSG Dividend-Like Income Using Covered Calls

With HCSG at 41.82, 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% 1.25 0.3
5% 2.09 0.6
10% 4.18 1.1

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 HCSG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 45.00 0.60 64 0.9 2.96 (7.1%)
Mar 15 45.00 1.10 148 0.7 2.96 (7.1%)
5% Yield On HCSG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 45.00 0.60 64 0.9 2.96 (7.1%)
Mar 15 45.00 1.10 148 0.7 2.96 (7.1%)

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