PAGP Dividend Type Payments

Plains GP Holdings, L.P. - Class A Shares representing limited partner i dividend

Although PAGP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Plains GP Holdings, L.P. - Class A Shares representing limited partner i 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):

Plains GP Holdings, L.P. - Class A Shares representing limited partner i (PAGP)
Bid Ask Last Change Volume P/E Market Cap
19.20 19.45 19.37 -0.02 970K 27 3.8B

PAGP Dividend-Like Income Using Covered Calls

With PAGP at 19.37, 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% 0.58 0.2
5% 0.97 0.3
10% 1.94 0.5

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 PAGP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 20.00 0.25 50 0.5 0.55 (2.8%)
Jul 18 20.00 0.10 22 0.5 0.55 (2.8%)
5% Yield On PAGP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 20.00 0.25 50 0.5 0.55 (2.8%)
Jul 18 20.00 0.10 22 0.5 0.55 (2.8%)

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