MGY Dividend
Although MGY has a dividend of 0.15 with an ex-dividend date of May 12, 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 Tue 4:16 PM ET):
| Magnolia Oil & Gas Corporation Class A (MGY) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 20.28 |
22.00 |
21.31 |
-0.36 |
1.9M |
11 |
4.2B |
MGY Dividend-Like Income Using Covered Calls
With MGY at 21.31, 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% |
0.64 |
0.2 |
| 5% |
1.07 |
0.3 |
| 10% |
2.13 |
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 |
| May 16 |
22.50 |
0.25 |
18 |
1.4 |
0.50 (2.3%) |
| Sep 19 |
22.50 |
1.40 |
144 |
1.0 |
0.50 (2.3%) |
| 5% Yield On MGY Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
22.50 |
0.25 |
18 |
1.4 |
0.50 (2.3%) |
| Sep 19 |
22.50 |
1.40 |
144 |
1.0 |
0.50 (2.3%) |
| 10% Yield On MGY Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
22.50 |
0.25 |
18 |
1.4 |
0.50 (2.3%) |
| Sep 19 |
22.50 |
1.40 |
144 |
1.0 |
0.50 (2.3%) |
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