HTHT Dividend Type Payments

HUAZHU GROUP LTD ADS dividend

Although HTHT has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on HUAZHU GROUP LTD ADS to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 2:05 PM ET):

HUAZHU GROUP LTD ADS (HTHT)
Bid Ask Last Change Volume P/E Market Cap
33.00 33.02 33.01 +0.18 1.7M 52 10B

HTHT Dividend-Like Income Using Covered Calls

With HTHT at 33.01, 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% 0.99 0.3
5% 1.65 0.5
10% 3.30 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 HTHT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 41.25 0.15 33 0.5 8.23 (24.9%)
Oct 19 40.00 0.55 61 0.9 6.98 (21.1%)
5% Yield On HTHT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 41.25 0.15 33 0.5 8.23 (24.9%)
Oct 19 40.00 0.55 61 0.9 6.98 (21.1%)
10% Yield On HTHT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 38.75 0.35 33 1.1 5.73 (17.4%)
Oct 19 35.00 1.70 61 2.8 1.98 (6.0%)

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