XEC Dividend

Cimarex Energy dividend

Although XEC has a dividend of 0.20 with an ex-dividend date of May 14, you can sell covered calls on Cimarex Energy to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):

Cimarex Energy (XEC)
Bid Ask Last Change Volume P/E Market Cap
69.63 74.00 72.43 +0.35 1.1M 8.7 7.3B

XEC Dividend-Like Income Using Covered Calls

With XEC at 72.43, 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% 2.17 0.6
5% 3.62 1.0
10% 7.24 2.0

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 XEC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 80.00 0.30 29 1.0 6.00 (8.3%)
May 17 85.00 0.50 58 0.9 11.00 (15.2%)
5% Yield On XEC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 80.00 0.30 29 1.0 6.00 (8.3%)
May 17 80.00 1.25 58 2.2 6.00 (8.3%)
10% Yield On XEC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 75.00 1.35 29 4.7 1.00 (1.4%)
May 17 80.00 1.25 58 2.2 6.00 (8.3%)

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