LGIH Dividend Type Payments

LGI Homes, Inc. dividend

Although LGIH has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on LGI Homes, Inc. to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 10:40 AM ET):

LGI Homes, Inc. (LGIH)
Bid Ask Last Change Volume P/E Market Cap
46.53 46.97 46.75 +0.39 60K 10 1.1B

LGIH Dividend-Like Income Using Covered Calls

With LGIH at 46.75, 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% 1.40 0.4
5% 2.34 0.6
10% 4.68 1.3

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 LGIH Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 15 50.00 4.20 149 2.8 3.03 (6.5%)
Jan 16 50.00 1.05 30 3.5 3.03 (6.5%)
5% Yield On LGIH Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 15 50.00 4.20 149 2.8 3.03 (6.5%)
Jan 16 50.00 1.05 30 3.5 3.03 (6.5%)
10% Yield On LGIH Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 15 50.00 4.20 149 2.8 3.03 (6.5%)
Jan 16 50.00 1.05 30 3.5 3.03 (6.5%)

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