HLI Dividend Type Payments
Although HLI has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Houlihan Lokey, Inc. Class A to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 4:16 PM ET):
| Houlihan Lokey, Inc. Class A (HLI) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 152.73 |
166.69 |
162.08 |
-0.14 |
277K |
31 |
11B |
HLI Dividend-Like Income Using Covered Calls
With HLI at 162.08, 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% |
4.86 |
1.3 |
| 5% |
8.10 |
2.2 |
| 10% |
16.21 |
4.4 |
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 HLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
170.00 |
0.50 |
17 |
2.9 |
3.31 (2.0%) |
| Sep 19 |
170.00 |
7.10 |
143 |
5.0 |
3.31 (2.0%) |
| 5% Yield On HLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
170.00 |
0.50 |
17 |
2.9 |
3.31 (2.0%) |
| Sep 19 |
170.00 |
7.10 |
143 |
5.0 |
3.31 (2.0%) |
| 10% Yield On HLI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 19 |
170.00 |
7.10 |
143 |
5.0 |
3.31 (2.0%) |
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