Top Performing Utility Dividend Stocks So Far In 2014

by Robert Hauver
The market has had a bumpy ride so far in 2014, with February turning in the best performance, rising over 4%, after January’s -3.6% pullback. Cap this off with a less than 1% gain for the S&P 500 in March, and you’ve got an unimpressive 1.3% gain for the first quarter:
SP-4-9-14
With this kind of up and down ride, you’d want to find some dividend stocks which offer defense, in addition to income. With the pullback in many biotech stocks, the Healthcare sector no longer leads,(although it’s still up nearly 5%), but has given way to the Utilities sector, which is up over 10% year-to-date.
Here’s a look at the chart for the Utilities ETF, XLU:
XLU-2014-04-08
We looked further into XLU’s top holdings, and came up with these top 5 utility stocks, all of which are large cap dividend paying stocks. Another common feature is that they all have somewhat lower forward P/E’s, meaning that their earnings should improve in their next fiscal year. Duke, DUK, and Southern, SO, have the lowest P/E’s, relative to their 5-year P/E ranges:
UTIL-PE
This is how they’ve performed year-to-date, and over the past month, and over the past 52 weeks. Nuclear-based Excelon, EXC, has outperformed the pack year-to-date, and over the past month, but is still up only 3.62% over the past year. Contrasting with that performance is more steady Next Era Energy, NEE, which has made over half of its 1-year 25.90% gains, by rising 13.61% in 2014:
UTIL-PERF
Dividends: With their 4%-plus dividend yields, Southern CO., SO, and DUK, are both listed in the Utilities section of our High Dividend Stocks By Sector Tables. Although their yields are lower, Dominion, D, and NEE, have the best 5-year dividend growth rates:
UTIL-DIV
Options: If you want to add more downside protection to these stocks, selling covered calls offers you more immediate income, and a lower breakeven. NEE has the most attractive call options of the group. This June $97.50 call pays $2.60, over 3 times NEE’s next quarterly dividend. (Our free Covered Calls Table has more info on this and over 30 other trades.)
UTIL-NEE-CALL
Here are the major income scenarios for this trade. The $97.50 strike price is $1.07 above NEE’s price/share, which amply rewards you if your shares get assigned prior to the ex-dividend date for the $.73 dividend:
UTIL-NEE-CALLINC
Selling cash secured put options is another way to profit from these defensive stocks. In fact, if you sell puts below the stock’s share price, you’ll get an even lower breakeven, and improve upon their defensive nature. This is another June trade, but this put has a $95.00 strike price, and a $92.05 breakeven, which is 4.5% below NEE’s price/share. You won’t receive any dividends, but, just like selling calls, you’ll be paid your option premium within 3 days of the trade, often sooner. You can find more info about this and over 30 other trades in our Cash Secured Puts Table.
UTIL-NEE-PUT
Financials: It’s a mixed bag, Dominion and Next Era have an edge over the rest of the group for some of these metrics, but they do carry more debt:
UTIL-ROE
Valuations: Excelon has the lowest valuations for these metrics:
UTIL-PB
Disclosure: Author was long shares of Southern, SO, at the time of this writing.
Disclaimer: This article was written for informational purposes only. Author not responsible for any errors, omissions, or actions taken by third parties as a result of reading this article.
Copyright DeMar Marketing 2014. All rights reserved.

The 5 Best Performing High Dividend Stocks In 2014

by Robert Hauver
We thought we’d take a different approach in this article, and look at high dividend stocks within the S&P 500 that are performing well in 2014, vs. those that are oversold and/or undervalued. Not surprisingly, 3 out of 5 of these top dividend stocks are from the Utilities and Healthcare sectors, which are the 2 top sectors year to date.
TOPDIVSTKS-PROFILE
Performance through 3/17/14: A Financial stock, AIV, is the top performer of this group so far in 2014, but, interestingly, made most of its gains in January and February, and is only up around 2% in March.
Garmin, (GRMN), a tech stock, has made all of its net gains over the past month.
The more defensive Utilities stocks, PEG and AEE, show a more balanced performance, both rising in January and February, in addition to the past trading month.
TOPDIVSTKS-PERF

Dividends: With its 4%-plus yield, we’ve added Public Enterprise Group, (PEG), to the Utilities section our High Dividend Stocks By Sector Tables. You’ll also find Lilly, (LLY), in the Healthcare section of the tables.
TOPDIVSTK-DIV

Options: 2 of these dividend paying stocks also have fairly high options yields – Garmin and Lilly. We’ve listed July Covered Call trades for both stocks below. Both stocks have ex-dividend dates for their next quarterly dividends, prior to the July call expiration, so you can effectively increase your overall yield substantially, via the combo of the dividend and option yields.
Garmin’s call option payout is nearly 5 times its dividend, and Lilly’s call option pays 4 times its dividend.
GRMN-LLY-CALLS
You can find more details on these and over 30 other trades in our free Covered Calls Table.
Both trades have call options which are enough above the stock’s share/price, to amply replace the dividend income, via price gains, if your shares get assigned prior to the ex-dividend date.
Here are the major income scenarios for the Garmin trade:
GRMN-CALLINC
Cash Secured Puts: Our Cash Secured Puts Table also lists July put trades for Garmin and Lilly, (along with over 30 other trades). These put option trades both have strike prices which are below these stocks’ current price/share, thereby achieving a lower breakeven:
TOPDIVSTK-PUT
Financials:
TOPDIVSTK-ROE
Valuations:
TOPDIV-PB

Disclosure: Author held no positions as of yet in any of the stocks mentioned in this article at the time of this writing.
Disclaimer: This article was written for informational purposes only. Author not responsible for any errors, omissions, or actions taken by third parties as a result of reading this article.

Buy This New High Dividend Stock Below Par For An 8% Plus Yield

by Robert Hauver
One of our favorite high dividend stocks, Seaspan, (SSW), just issued a new “E” series Preferred stock, which pays 8.25% per annum, via quarterly dividends. We’ve owned SSW and its various preferred shares off and on through the years, and we’ve had very good results with both the common and the preferred.
In particular, SSW’s preferred shares have been a very reliable dividend income source, and they’ve also been pretty resilient to market pullbacks. We list both the new E series preferred, (SSW-E), and SSW in our High Dividend Stocks By Sector Tables Industrials section.
Company Profile: Seaspan provides many of the world’s major shipping lines with outsourcing alternatives to vessel ownership by offering long-term leases on large, modern containerships combined with industry leading ship management services.
Seaspan’s managed fleet consists of 105 containerships, representing a total capacity of over 800,000 TEU, including 32 newbuilding containerships on order scheduled for delivery to Seaspan and third parties by the end of 2016.
Seaspan’s current operating fleet of 71 vessels has an average age of approximately seven years and an average remaining lease period of approximately five years. SSW’s long-term lease business model affords it stable cash flow, with which to pay dividends.

Preferred & Common Dividends:
Buying newly issued preferred shares often offers the retail investor a chance to buy shares below or near the liquidation, par value.
Why is this important? Because, when and if the shares get called in by the issuing company, you’ll also realize a capital gain, if you bought them below the par value. In this case, though, since these shares are cumulative, AND aren’t callable by Seaspan until 2019, so you’ll have ample time, 5 years, to collect around $10.31 in quarterly dividends, and bring your breakeven way below the $25.00 par value.
These shares just started trading on 2/10/14, and are trading right around par. Like many preferred shares, the various websites often show a different ticker symbol for this stock.
The 1st ex-dividend date should be around 4/27/14:
SSW-E-DIV
SSW also has a good dividend yield on its common shares:
SSW-DIV
Options
If you’re interested in more immediate income, there’s an attractive covered calls trade for SSW, which expires in August 2014. The at-the-money, August $22.50 call options are currently paying 2 times the amount of SSW’s next 2 quarterly dividends.
You can see more info on this and over 30 other covered call trades in our free Covered Calls Table.
SSW-CALL
The $22.50 strike price is also $.38 above SSW’s $22.12 price, so it offers a small capital gain opportunity as well:
SSW-CALLINC

We haven’t added any put trades for SSW to our Cash Secured Puts Table as of yet, since its puts aren’t yielding very much currently.
Author: Robert Hauver,copyright 2014 DeMar Marketing, All Rights Reserved.
Disclosure: Author owned shares of SSW and SSW-E at the time of this writing.
Disclaimer: This article was written for informational purposes only. Author not responsible for any errors, omissions, or actions taken by third parties as a result of reading this article.

Dow Dividend Stocks For 2014 – Dividends vs Covered Calls

by Robert Hauver

After the big gains in 2013, (and subsequent declining yields), income investors are scouring the market for safe yields in 2014. With this in mind, we took a look at the 2 highest yielding dividend paying stocks in the DOW 30: AT&T, (T), and its arch rival Verizon, (VZ). In particular, we compared these 2 stocks’ next quarterly dividends to covered call premiums, in order to see if you could increase your yield, while gaining some downside protection.

DIVIDENDS: Both of these stocks are listed in our High Dividend Stocks By Sector Tables, in the Telecoms section. AT&T has a higher dividend yield than Verizon, but Verizon’s 5-year dividend growth rate trumps AT&T’s.
T-VZ-DIV
COVERED CALLS: These April 2014 covered call options trades both have strikes above each stock’s price/share, which offers you a chance for some assigned price gains, in addition to increasing the yield above that of the dividends:
TVZ-CALL
Here are the 3 main income scenarios for each trade. You can find more details for these 2 trades and over 30 others in our free Covered Calls Table.
T-CALLINC
Since VZ’s strike price is further above its share/price, you have more of a chance for potential price gains:
VZ-CALLINC

EARNINGS: To be sure, neither of these stocks are growth stocks – here’s how they stack up against each other:
TVZ-PEG
VALUATIONS: The good news is that both stocks look to have more attractive P/E’s in 2014. VZ is commanding a premium over T in its Price/Book and P/E ratios.
TVZ-PB
FINANCIALS: VZ has used more debt for financing than AT&T has, and has a higher Operating Margin and ROI:
TVZ-ROE
PERFORMANCE: While VZ lagged the market during 2013, AT&T went absolutely nowhere over the past 52 weeks:
TVZ-PERF
Author: Robert Hauver,copyright 2014 DeMar Marketing, All Rights Reserved.
Disclosure: Author had no positions at the time of this writing.
Disclaimer: This article was written for informational purposes only. Author not responsible for any errors, omissions, or actions taken by third parties as a result of reading this article.

2 Dividend Paying Stocks With High Yield Covered Calls

by Robert Hauver
Although we often cover high dividend stocks, this article will focus on 2 dividend paying stocks which have only average dividend yields. However, they both have high options yields for their covered calls and cash secured puts, which more than make up for their dividends. In fact, these calls and puts pay over 14 times the amount of these stocks’ upcoming quarterly dividends. The second pick, listed at the bottom of this article, has 40%-plus annualized yields on both its covered call and cash secured put options.

1. Whirlpool Corp., (WHR), founded in 1898, manufactures and markets home appliances worldwide. The company’s principal products include laundry appliances, refrigerators and freezers, cooking appliances, dishwashers, mixers, and other portable household appliances. It also produces hermetic compressors for refrigeration systems. The Whirlpool brand is the world’s No. 1 global appliance brand. Whirlpool also owns many other marquee brands, including Maytag, Kitchen-Aid, Jenn-Air, and Amana.

WHR’s price/share has had quite a run up over the past year:
WHR-PERF1113
Most likely due to its quickly growing sales, which have outrun its price/share, and make it still appear undervalued on a PEG basis:
WHR-PEG NOV
WHR has a modest dividend yield…
WHR-DIV1113
But its covered calls have much higher yields. In the trade below WHR’s calls outpay its dividends by over 16 times :
WHR-CALL nov
There are 3 main scenarios for this covered call trade:
WHR-CALLINC NOV
You can see more info for this and over 30 other covered call trades in our free Covered Calls Table.
WHR’s put options also have a big payout that’s much higher than its dividends:
WHR-PUT nov
You can find more details for this and over 30 other cash secured put trades in our free Cash Secured Puts Table.

2. Questcor Pharmaceuticals, (QCOR), is a biopharmaceutical company, which provides drugs for the treatment of multiple sclerosis, nephrotic syndrome, and infantile spasms indications. It primary product is H.P. Acthar Gel, for which there are several FDA-approved applications. QCOR has enjoyed huge growth over the past 5 years, growing its revenues over 59%, and its EPS by nearly 44%. Its trailing 12-month EPS growth now stands at nearly 65%, and its revenue has grown by almost 69%.
Like WHR, QCOR has had a big run up in its share price over the past year – it’s up 164% from its 52-week low, and now is around 15% below its 52-week high. It has pulled back from its high of $74.42, due to concerns about an ongoing government investigation into its promotional practices. This concern has also led to high short interest of over 21%. However, it may take around 3 years for this case to play out.

In the meantime, QCOR has some very high options yields, which dwarf its dividend yield:
This Covered Call trade expires in April, and pays $10.70, a nearly 40% annualized yield.

(This trade is also listed in our Covered Calls Table):
QCOR CALL NOV
QCOR also has high yield cash secured puts. The April trade below offers you a nearly 44% annualized yield, and also gives you a breakeven that’s over 22% below QCOR’s price/share.
QCOR-PUT NOV
(This trade is also listed in our Cash Secured Puts table. All of our options tables are updated throughout the trading day.)

Author: Robert Hauver, copyright 2013 DeMar Marketing, All Rights Reserved.
Disclosure: Author was hort QCOR put options at the time of this writing.
Disclaimer: This article was written for informational purposes only. Author not responsible for any errors, omissions, or actions taken by third parties as a result of reading this article.

An Oversold, Undervalued Blue Chip Dividend Stock With High Options Yields

by Robert Hauver

This article will focus on the “Rodney Dangerfield” of drilling dividend stocks, UK-based Ensco plc, (ticker ESV), which has had big dividend and earnings growth, and looks poised to continue that trend. Unfortunately for its shareholders, the market has given ESV little respect over the past year, sending it down to an oversold price/share currently:
ESV1-CHART
ESV1-PERF

Undervalued Earnings: ESV has concentrated on modernizing its fleet, and has one of the youngest fleets in the drilling industry, with 9 new rigs delivered over the past 3 years, and 8 more to be delivered through 2015. This has helped it achieve higher margins than its competitors, and has also contributed to strong growth over the trailing 4 quarters:
EVS1-QTRLY

Analysts are estimating continued EPS growth in 2014, which, combined with ESV’s low P/E, show it to be undervalued on a PEG basis:
ESV1-PEG
Looking further into the future, ESV also has a low 5-year forward PEG ratio of .60:
ESV1-EPS5YR
More Valuations: ESV also looks undervalued vs. its industry on a Price/Sales and a Price/Book basis:
ESV1-PB
Strong Dividend Growth: ESV has raised its quarterly dividend all the way from $.025 in 2008, to $.50 in 2013.
ESV1-DIV
Options: Although ESV isn’t in the universe of high dividend stocks, it does have high options yields. You can substantially increase your yield on ESV’s dividends, via selling Covered Calls.
This March 2014 trade, from our Covered Calls Table, has a $55.00 strike price. The call premium pays 3 times what ESV’s next 2 dividends pay. You’ll also get paid this covered call premium now, vs. having to wait for ESV’s next 2 dividends to be paid out:
ESV1-CALL
We’ve listed the 3 major scenarios below for this call options trade:
ESV1-CALLINC
Puts: If you want to achieve a lower breakeven cost now, selling Cash Secured Puts is the way to go. This put options trade also expires in March 2014, and pays en even higher options premium, of $3.90, while giving you a breakeven of $51.10, which is just above ESV’s 52-week low. You can see more details for this and over 30 other Put options trades, in our Cash Secured Puts Table:
ESV1-PUT
Financials: As we mentioned above, ESV enjoys much higher margins than its industry averages. It carries a bit more debt, but it does have an Interest Coverage ratio of 11.52.
ESV1-ROE
Author: Robert Hauver, copyright 2013 DeMar Marketing, All Rights Reserved.
Disclosure: Author had no ESV stock or options positions yet at the time of this writing, but may initiate positions over the next 72 hours.
Disclaimer: This article was written for informational purposes only. Author not responsible for any errors, omissions, or actions taken by third parties as a result of reading this article.

A High Flying Dividend Stock With Double Digit Covered Calls And Put Options Yields

by Robert Hauver

Although we normally cover dividend paying stocks which also have options, this article focuses on a dividend stock that has already paid its annual dividend. However, as you’ll see below, its options yields heavily eclipse its dividends.
Sitting up at the top of our free Covered Calls Table is Himax Technologies, (HIMX), a semiconductor stock, which currently has a call option yield of nearly 14% for its December $9.00 call options. Although HIMX already went ex-dividend for its annual dividend in July, this Dec. covered call trade pays over 4 times HIMX’s annual $.25 dividend:
HIMX1-CALL
Since there aren’t dividends involved, there are two main scenarios for this trade:
A) Static – You’ll collect $1.15 in call options premium now, and keep your shares of HIMX, if it doesn’t rise above the $9.00 call price between the time of the trade and its December 2013 expiration.
B) Assigned – If HIMX does rise above the $9.00 call price between the time of the trade and its December 2013 expiration, your HIMX shares will be assigned/sold, but you will receive an additional $.53 in price gain, (the difference between the $9.00 strike price and HIMX’s $8.47 price/share).
HIMX1-CALLINC
HIMX also has very attractive put options. This December trade, from our Cash Secured Puts Table, pays just over 4 times HIMX’s $.25 dividend, and it offers a breakeven cost that is 18% below HIMX’s $8.47 cost per share. Considering that this stock has gained over 250% year-to-date, selling puts below its share price may be even more appealing than selling covered calls:
HIMX1-PUT
HIMX1-PERF
A big turnaround in earnings: HIMX has had negative earnings growth over the past 5 years…
HIMX1-PEG5YR
…but this has reversed itself rapidly during the most recent 4 quarters:
HIMX-QTRLYEPSREV
Analysts are predicting big Earnings growth for HIMX in 2014, due to its quickly developing relationship with Google, which has invested in HIMX’s subsidiary, Himax Display, in order to lock in HIMX as a supplier of LCOS modules for Google Glasses. Even after its huge price gains this year, HIMX still looks undervalued on a forward PEG basis, as it has a very low 2014 PEG of .34:
HIMX1-PEG

Additional Valuations: HIMX’s Price/Tangible Book is higher than its Industry averages, but its Price/Sales is lower.
HIMX1-PB
Financials: HIMX has much better Mgt. Efficiency ratios, a higher Operating Margin, and lower debt, than its peers:
HIMX1-ROE
Author: Robert Hauver, copyright 2013 DeMar Marketing, All Rights Reserved.
Disclosure: Author was long HIMX shares and short HIMX put options at the time of this writing.
Disclaimer: This article was written for informational purposes only. Author not responsible for any errors, omissions, or actions taken by third parties as a result of reading this article.

How To Buy This Blue Chip Dividend Stock 9% Below Its 52-Week Low

by Robert Hauver

One of the world’s most venerable blue chip dividend stocks, International Business Machines, (IBM), has gotten hammered by the market, since hitting a high of over $213.00 in March, and is now very oversold:

IBM-CHART8-23-13

IBM’s disappointing second quarter 2013 earnings report in late June didn’t help matters – sales and earnings were both down. One bright spot was that estimated services backlog at June 30 was up 3% year over year.

IBM-Q2-13QTR

Earnings Forecast 2013-2014: The average analyst EPS growth forecast for IBM in 2014 is currently 8.52%, giving it a 1.46 2014 PEG value, so we can’t say it’s undervalued on a growth basis:

IBM-AUG-PEG

However, on a P/E and Price/Sales basis, it does look cheaper than its Industry’s averages. Part of IBM’s problem has been the slowdown in Europe, but, it looks like that area may finally be pulling out of its recession in the next few quarters.

IBM-AUG-PB

Dividends: IBM has had a good dividend growth rate over the past 5 years, and increased its quarterly dividend again in May, to $.95, from $.85.

IBM-AUG-DIV

Thinking long term: Is a dominant company like IBM going to fade away? We don’t think so. Neither does Mr. Long Term himself, Warren Buffett- he’s a major buyer of IBM, having bought shares since Q3 2011, through Q2 2013. IBM is now Berkshire Hathaway’s 3rd largest holding, at 14.62% of its portfolio.

How to play it safe with long-term put options: If you’re leery of IBM falling further, your best bet may be to sell cash secured put options below IBM’s share price. We’ve laid out a January 2015 put trade below, which gives you a breakeven cost of $166.40, which is over 9% below IBM’s 8/23/13 share price of $185.16. The Jan. 2015 $185.00 put option pays well over 3 times what IBM’s dividends will pay over the next 17 months. (Please note that, unlike covered call sellers, put sellers don’t receive dividends.)

You can find more details on this and over 30 other put trades in our free Cash Secured Puts Table:

IBM-AUG-PUT

We also list a covered call trade for IBM, along with over 30 other covered calls trades, in our free Covered Calls Table.

Financials: Thanks to its ongoing stock buyback program, IBM has a very high Return On Equity ratio of over 83%. Its Operating Margin is also much higher than industry averages. It carries more debt, but it has a strong Interest Coverage figure of 41.85:

IBM-AUG-ROE

Performance: IBM is just 1.43% over its 52-week low, as of 8/23/13. As we’re heading into the market’s weakest months, Sept. and Oct., it may go lower, and offer even more compelling, higher put-selling yields and lower long term breakevens.

IBM-AUG-PERF

Author: Robert Hauver, copyright 2013 DeMar Marketing, All Rights Reserved.
Disclosure: Author was short IBM put options at the time of this writing.
Disclaimer: This article was written for informational purposes only. Author not responsible for any errors, omissions, or actions taken by third parties as a result of reading this article.

These Covered Calls Offer Double Digit Yields

by Robert Hauver

There are 2 dividend stocks in our Covered Calls Table which are currently offering high options yields: MDC Holdings, (MDC), and Hooker Furniture, (HOFT). We previously wrote about MDC, and its call options continue to offer good yields. Both of these companies have gotten an earnings boost from the US Housing Recovery, and look to be on track for continued earnings growth over this year and next year:

MDC-HOFT-QTRLY

40 year old MDC is a homebuilder, based in Denver, Co which sells its new homes throughout the US, under the name “Richmond American Homes”.

Virginia-based HOFT is a a home furnishings marketing and logistics company, Which, together with its subsidiaries, designs, imports, manufactures, and markets residential furniture products in the US.

Dividends: MDC pre-paid 3 of its 2013 quarterly dividends in December 2012, to avoid a higher dividend tax rate for its shareholders. It should pay its next $.25 dividend in November 2013:

MDC-HOFT-DIV

Options: Neither of these companies are high dividend stocks, but they do offer high options yields, via their November covered call options, which are far enough out of the money, that you can also potentially participate in some price gains. There’s also an attractive put selling trade for MDC, which is listed in our Cash Secured Puts Table.

There are 3 basic scenarios for these covered call trades:

(A) Static – The stock doesn’t rise to or above the option strike price before or near the ex-dividend date, in which case you keep the shares, and you collect the dividend and option $.

(B) Assigned – The stock does rise to or above the option strike price before or near the ex-dividend date, in which case you must sell the shares, and you collect the price gain $ and option $, but no dividend.

(C) Assigned after ex-dividend date – The stock does rise to or above the option strike price AFTER the ex-dividend date, in which case you must sell the shares, and you collect the price gain $, option $, and the dividend $.

MDC-CALL

MDC-CALLINC

HOFT-CALL

HOFT-CALLINC

Performance: Like other homebuiders, MDC has pulled back in price over the past few weeks, due to concerns that Fed tapering will continue escalate rates and slow down housing demand. HOFT is under 4% below its 52-week high:

MDC-HOFT-PERF

Financials: Both firms work on low Operating Margins, and HOFT has a cleaner balance sheet, being debt-free:

MDC-HOFT-ROE

Author: Robert Hauver, copyright 2013 DeMar Marketing, All Rights Reserved.
Disclosure: Author was short MDC put options at the time of this writing.
Disclaimer: This article was written for informational purposes only. Author not responsible for any errors, omissions, or actions taken by third parties as a result of reading this article.

2 High Yield Covered Calls Trades

by Robert Hauver

Looking for quick income from your trading? There are 2 trades sitting near the top of our Covered Calls Table, which offer annualized yields of well over 25%. These aren’t high dividend paying stocks, but, rather, they’re dividend stocks with high options yields.

These 2 stocks couldn’t be more dissimilar. One is a U.S. homebuilder, and the other is a U.S.-based, multinational tech giant:

MDC Holdings (MDC): MDC’s homebuilding business activities include the purchase of finished lots or development of lots for the construction and sale of single-family detached homes to first-time and first-time move-up homebuyers under the Richmond American Homes name. The company’s financial services business activities comprise the origination of mortgage loans primarily for homebuyers; provision of third-party insurance products to homebuyers; and title agency services to homebuyers in Colorado, Florida, Maryland, Nevada, and Virginia. It also provides insurance coverage on homes sold and for work performed in completed subdivisions; and re-insures the claims. M.D.C. Holdings, Inc. was founded in 1972 and is based in Denver, Colorado.

Cisco Systems (CSCO): Cisco designs, manufactures, and sells Internet protocol (IP) based networking and other products related to the communications and information technology industries worldwide. It offers switching products, including fixed-configuration and modular switches, and storage products that provide connectivity to end users, workstations, IP phones, access points, and servers, as well as function as aggregators on local-area networks and wide-area networks; and routers that interconnects public and private IP networks for mobile, data, voice, and video applications.

Dividends: MDC, which pays a $.25 quarterly dividend, paid out its first 3 2013 dividends in December 2012, to help its shareholders avoid higher dividend tax rates in 2013. Not to worry, however, since you can recapture this amount and more, via selling covered calls. (See below)

CSCO made a hefty raise to its quarterly dividend in late 2012, upping it by over 21%, to $.17, from $.14. CSCO also goes ex-dividend on 7/1/13.

Options: MDC currently has an out-of-the-money September $37.00 put which pays $2.65, which equals 7.25%, or 28.46% annualized for this approx. 3-month trade. If MDC moves to $37.00 or higher, your MDC shares will get assigned, resulting in an additional $.46/share gain, for a total potential annualized assigned yield of over 33%.

(You can see more details on this and over 35 other call option trades in our free Covered Calls Table.)

CSCO has a shorter call expiration, a July $25.00 call option, which pays $0.46, offering you a 27.57% annualized yield. This call is also above CSCO’s share price, so if CSCO rises to $25.00 or above, you’ll receive an additional $.18/share.

MDC-CSCO-CALLS

There are also attractive put options selling opportunities for MDC, which you can learn more about, in our free Cash Secured Puts Table.

Author: Robert Hauver, copyright 2013 DeMar Marketing, All Rights Reserved.
Disclosure: Author was short MDC put options, and long CSCO shares at the time of this writing.
Disclaimer: This article was written for informational purposes only. Author not responsible for any errors, omissions, or actions taken by third parties as a result of reading this article.