PEGI Dividend

PATTERN ENERGY GROUP INC CL dividend

Although PEGI has a dividend of 0.42 with an ex-dividend date of Sep 27, you can sell covered calls on PATTERN ENERGY GROUP INC CL to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 3:00 PM ET):

PATTERN ENERGY GROUP INC CL (PEGI)
Bid Ask Last Change Volume P/E Market Cap
19.16 19.17 19.17 +0.41 779K 14 1.8B

PEGI Dividend-Like Income Using Covered Calls

With PEGI at 19.17, 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% 0.58 0.2
5% 0.96 0.3
10% 1.92 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 PEGI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 20.00 0.30 39 0.8 0.83 (4.3%)
Dec 21 20.00 0.70 130 0.5 0.83 (4.3%)
5% Yield On PEGI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 20.00 0.30 39 0.8 0.83 (4.3%)
Dec 21 20.00 0.70 130 0.5 0.83 (4.3%)
10% Yield On PEGI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 20.00 0.30 39 0.8 0.83 (4.3%)
Dec 21 20.00 0.70 130 0.5 0.83 (4.3%)

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