MGPI Dividend Type Payments

Although MGPI has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on MGP Ingredients, Inc to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 12:15 PM ET):

MGP Ingredients, Inc (MGPI)
Bid Ask Last Change Volume P/E Market Cap
77.31 77.43 77.43 -0.35 51K 36 1.3B

MGPI Dividend-Like Income Using Covered Calls

With MGPI at 77.43, 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% 2.32 0.6
5% 3.87 1.1
10% 7.74 2.1

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 MGPI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 85.00 0.35 28 1.3 7.57 (9.8%)
May 17 95.00 0.45 57 0.8 17.57 (22.7%)
5% Yield On MGPI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 85.00 0.35 28 1.3 7.57 (9.8%)
May 17 90.00 1.00 57 1.8 12.57 (16.2%)
10% Yield On MGPI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 80.00 1.50 28 5.4 2.57 (3.3%)
May 17 85.00 2.00 57 3.5 7.57 (9.8%)

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Want more examples? MGP Dividend | MGRC Dividend