SHO Dividend

Sunstone Hotel Investors, Inc dividend

Although SHO has a dividend of 0.05 with an ex-dividend date of Mar 28, you can sell covered calls on Sunstone Hotel Investors, Inc to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):

Sunstone Hotel Investors, Inc (SHO)
Bid Ask Last Change Volume P/E Market Cap
14.63 14.70 14.69 +0.04 1.9M 14 3.3B

SHO Dividend-Like Income Using Covered Calls

With SHO at 14.69, 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% 0.44 0.1
5% 0.73 0.2
10% 1.47 0.4

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 SHO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 15.00 0.05 32 0.2 0.30 (2.0%)
Jun 21 15.00 0.35 96 0.4 0.30 (2.0%)
5% Yield On SHO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 21 15.00 0.35 96 0.4 0.30 (2.0%)
Sep 20 15.00 0.50 187 0.3 0.30 (2.0%)

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