MEOH Dividend

Methanex Corp dividend

Although MEOH has a dividend of 0.36 with an ex-dividend date of Sep 13, you can sell covered calls on Methanex Corp 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):

Methanex Corp (MEOH)
Bid Ask Last Change Volume P/E Market Cap
42.22 43.43 43.23 +0.87 424K 6.1 3.2B

MEOH Dividend-Like Income Using Covered Calls

With MEOH at 43.23, 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% 1.30 0.4
5% 2.16 0.6
10% 4.32 1.2

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 MEOH Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 16 47.50 0.30 29 1.0 4.07 (9.4%)
Oct 18 52.50 0.35 92 0.4 9.07 (21.0%)
5% Yield On MEOH Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 16 47.50 0.30 29 1.0 4.07 (9.4%)
Oct 18 50.00 0.70 92 0.8 6.57 (15.2%)
10% Yield On MEOH Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 16 45.00 0.95 29 3.3 1.57 (3.6%)
Oct 18 47.50 1.25 92 1.4 4.07 (9.4%)

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