MGY Dividend
Although MGY has a dividend of 0.15 with an ex-dividend date of Aug 11, you can sell covered calls on Magnolia Oil & Gas Corporation Class A 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):
| Magnolia Oil & Gas Corporation Class A (MGY) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 22.33 |
24.13 |
23.45 |
-0.37 |
3.7M |
12 |
4.6B |
MGY Dividend-Like Income Using Covered Calls
With MGY at 23.45, 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% |
0.70 |
0.2 |
| 5% |
1.17 |
0.3 |
| 10% |
2.35 |
0.6 |
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 MGY Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 19 |
25.00 |
0.35 |
50 |
0.7 |
0.87 (3.7%) |
| Dec 19 |
25.00 |
1.05 |
141 |
0.7 |
0.87 (3.7%) |
| 5% Yield On MGY Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 19 |
25.00 |
0.35 |
50 |
0.7 |
0.87 (3.7%) |
| Dec 19 |
25.00 |
1.05 |
141 |
0.7 |
0.87 (3.7%) |
| 10% Yield On MGY Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 19 |
25.00 |
0.35 |
50 |
0.7 |
0.87 (3.7%) |
| Dec 19 |
25.00 |
1.05 |
141 |
0.7 |
0.87 (3.7%) |
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