HESM Dividend Type Payments
Although HESM has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Hess Midstream LP Class A Representing Limited Partner Interests to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 9:50 AM ET):
| Hess Midstream LP Class A Representing Limited Partner Interests (HESM) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 34.41 |
34.50 |
34.45 |
-0.38 |
45K |
12 |
4.5B |
HESM Dividend-Like Income Using Covered Calls
With HESM at 34.45, here's a table showing how big the annual "dividend" (i.e. 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% |
1.03 |
0.3 |
| 5% |
1.72 |
0.5 |
| 10% |
3.45 |
0.9 |
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 HESM Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
35.00 |
0.05 |
5 |
1.0 |
0.50 (1.5%) |
| May 15 |
35.00 |
1.50 |
152 |
1.0 |
0.50 (1.5%) |
| 5% Yield On HESM Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
35.00 |
0.05 |
5 |
1.0 |
0.50 (1.5%) |
| May 15 |
35.00 |
1.50 |
152 |
1.0 |
0.50 (1.5%) |
| 10% Yield On HESM Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
35.00 |
0.05 |
5 |
1.0 |
0.50 (1.5%) |
| May 15 |
35.00 |
1.50 |
152 |
1.0 |
0.50 (1.5%) |
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