HPT Dividend Type Payments

HOSPITALITY PROPERTIES TEST dividend

Although HPT has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on HOSPITALITY PROPERTIES TEST 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):

HOSPITALITY PROPERTIES TEST (HPT)
Bid Ask Last Change Volume P/E Market Cap
26.73 26.83 26.73 -0.13 378K 15 4.4B

HPT Dividend-Like Income Using Covered Calls

With HPT at 26.73, 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% 0.80 0.2
5% 1.34 0.4
10% 2.67 0.7

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 HPT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 27.00 0.05 3 1.7 0.17 (0.6%)
Nov 16 28.00 0.10 31 0.3 1.17 (4.4%)
5% Yield On HPT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 27.00 0.05 3 1.7 0.17 (0.6%)
Nov 16 27.00 0.30 31 1.0 0.17 (0.6%)
10% Yield On HPT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 27.00 0.05 3 1.7 0.17 (0.6%)
Nov 16 27.00 0.30 31 1.0 0.17 (0.6%)

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