LECO Dividend

Lincoln Electric Holdings, Inc. - Common Shares dividend

Although LECO has a dividend of 0.75 with an ex-dividend date of Jun 30, you can sell covered calls on Lincoln Electric Holdings, Inc. - Common Shares 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):

Lincoln Electric Holdings, Inc. - Common Shares (LECO)
Bid Ask Last Change Volume P/E Market Cap
182.21 215.00 201.20 +0.12 624K 25 11B

LECO Dividend-Like Income Using Covered Calls

With LECO at 201.20, 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% 6.04 1.7
5% 10.06 2.8
10% 20.12 5.5

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 LECO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 220.00 2.00 57 3.5 5.00 (2.5%)
Sep 19 220.00 3.70 92 4.0 5.00 (2.5%)
5% Yield On LECO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 220.00 2.00 57 3.5 5.00 (2.5%)
Sep 19 220.00 3.70 92 4.0 5.00 (2.5%)

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