These Undervalued Refining Dividend Stocks Have High Options Yields And More Room To Run

by Robert Hauver
As the price of crude oil has fallen this year, most energy-related stocks have gotten hammered…except for some refining stocks. Why? Because lower crude prices mean lower feedstock costs for refiners, and actually pump up refiners’ profit margins. This fact has not gone unnoticed by the market, which has favored some refiners over other energy-related stocks in recent weeks.
This article covers 2 dividend stocks which are beneficiaries of this turn in fortunes – Marathon Petroleum, (MPC), and Phillips 66, (PSX). While these aren’t high dividend stocks, they do have high options yields, which we’ll cover later on in the article.
MPC has done much better than PSX in all of the following time periods:
MPC-PSX-PERF

However, PSX’s fortunes may be about to change – Goldman Sachs analyst Neil Mehta just added PSX and MPC to his recommended Buy list on 11/18/14, and PSX is up over 3.7% over the last week.
Profiles:
MPC is engaged in refining, transporting, and marketing petroleum products primarily in the US. It operates through 3 segments: Refining & Marketing, Speedway, and Pipeline Transportation.
MPC refines crude oil and other feed stocks at its 7 refineries in the Gulf Coast and Midwest regions of the US; and purchases ethanol and refined products for resale. Its refined products include gasoline, distillates, propane, feed stocks and special products, heavy fuel oil, and asphalt.
MPC also sells transportation fuels and convenience products in the retail market through Speedway convenience stores, and transports crude oil and other feedstocks to its refineries and other locations.
MPC markets its refined products to resellers, consumers, independent retailers, wholesale customers, marathon-branded jobbers, its Speedway convenience stores, airlines, transportation companies, and utility companies, as well as exports its refined products.
As of2/4/14, MPC owned, leased, and had ownership interests in approximately 8,300 miles of pipeline, as well as owned and operated 1,480 convenience stores in 9 states of the United States; and operated 5,200 independently owned retail outlets in the 18 states of the United States.

PSX – PSX Phillips 66 operates as an energy manufacturing and logistics company, operating in 4 segments: Midstream, Chemicals, Refining, Marketing and Specialties.
Refining buys, sells, and refines crude oil and other feedstocks into petroleum products, such as gasolines, distillates, and aviation fuels in the United States, Europe, and Asia.
Marketing and Specialties purchases for resale and markets refined petroleum products comprising gasolines, distillates, and aviation fuels in the United States and Europe. This segment manufactures and sells specialty products, such as petroleum coke, waxes, solvents, and polypropylene.
Midstream transports crude oil and other feedstocks to its refineries and other locations, as well as delivers refined and specialty products, also gathers, processes, transports, and markets natural gas; and transports, fractionates, and markets natural gas liquids in the United States.
Chemicals produces and markets ethylene, propylene, and other olefin products. It also manufactures and markets aromatics products, such as benzene, styrene, paraxylene, and cyclohexane, as well as polystyrene and styrene-butadiene copolymers.

Dividends: Coincidentally, both of these stocks pay $.50 quarterly. PSX has a slightly shorter dividend history than MPC, as it was only spun off from Conoco Phillips in 2012. Since 2012, it has more than doubled its dividend, from $.20, to the current $.50.
MPC started paying dividends in 2011, and has also raised its payout from $.20 to $.50 per quarter.
Both stocks have a low dividend payout ratio.
MPC-PSX-DIV

Options: Although neither stock has a high dividend yield, you can dramatically improve upon their dividends by selling options. This MPC covered call trade expires in April 2015, and has a $95.00 strike price, which offers you $1.20 in potential price gains.
The PSX trade expires in May 2015, just long enough for you to qualify for a second quarterly dividend.
You can find more details on our free Covered Calls Table for these and over 25 other trades.
MPC-PSX-CALL
We’ve detailed the 3 main income scenarios for the MPC trade below:
MPC-CALLINC

An alternative strategy would be to sell cash secured puts below the stock’s price/share. Both of these trades’ put options offer you a much higher payout than the quarterly dividends – MPC’s pays $5.90, over 11 times its $.50 quarterly dividend, while PSX’s $75.00 put would pay you $5.40, over 5 times PSX’s next 2 dividends.
Our free Cash Secured Puts Table gives you more details on these and over 25 other put-selling trades.
MPC-PSX-PUTS

Undervalued Earnings: Both stocks look undervalued on a 2015 PEG basis – MPC has a very low .51 PEG, and PSX has a low .65 PEG:
MPC-PSX-PEG
Both firms had blowout earnings in their most recent quarter, even with lower sales figures, thanks to expanding margins, as the crude price was much cheaper than Q3 2013:
MPC-PSX-QTRLY
Valuations: Both stocks also look undervalued for most of the following metrics:
MPC-PSX-PB
Financials: In addition, they both have significantly better than average mgt. efficiency ratios, and carry less debt:
MPC-PSX-ROE
Disclosure: Author had no positions in MPC or PSX yet at the time of this publication
Disclaimer: This article was written for informational purposes only. Author not responsible for any errors or omissions.
Copyright: 2014 Demar Marketing All rights reserved

These 2 Undervalued, Oversold High Dividend Stocks Yield 10-12% & Go Ex-Dividend Soon

by Robert Hauver
Looking for bargains in the high dividend stocks department? This article covers 2 relatively new dividend paying stocks, both of which have been hammered along with the rest of the Energy/Basic Materials complex over the past month. In October alone, the Energy sector is down over -13%, while the Basic Materials sector is down over -10%. A rising US $, plus fears of a global recession, and a glut of oil have put pressure on these groups.
However, we have 2 stocks which we feel represent attractive long term values for income investors, due to certain advantages that their operations enjoy:
NSLP-OCIR-INDUSTRY-IPO

Company Profiles:
New Source Energy Partners L.P.: NSLP is engaged in the acquisition and development of oil and natural gas properties in the United States, and is rapidly growing its Oilfield Services division. Asof 12/13/13, NSLP had 124,759 gross acres in the Golden Lane field in east-central Oklahoma; and 161 gross proved undeveloped drilling locations. Its estimated proved reserves on its properties consisted of 20.6 MMBoe. NSLP is based in Oklahoma City, Oklahoma.

OCI Resources LP: OCIR is engaged in the trona ore mining and soda ash production businesses in the US and internationally. As a natural soda ash producer, OCI Resources has a big cost advantage over synthetic producers. It has approx. 23,500 acres of subsurface leased/licensed mining areas in the Green River Basin of Wyoming. OCIR also processes trona ore into soda ash, which is a raw material in flat glass, container glass, detergents, chemicals, paper, and other consumer and industrial products. OCI Resources LP is based in Atlanta, Georgia.

Dividends: Our High Dividend Stocks By Sectors Tables, lists both of these dividend stocks, (in the Energy and Basic Materials sections).
Both stocks have whopper dividend yields, thanks to the fall pullback – OCIR’s dividend yield is nearly 10%, and NSLP’s is over 12%.
They should both be going ex-dividend soon, sometime around 10/30/14:
NSLP-OCIR-DIV

Options: OCIR doesn’t have options currently. NSLP does have options, but our Covered Calls Table, and our Cash Secured Puts Table don’t list any NSLP trades in yet, since the options yields aren’t that attractive.

Performance: NSLP and OCIR have been hit hard over the past quarter and month, and are both oversold on their stochastic charts:
NSLP-OCIR-PERF
NSLP-CHART
OCIR-CHART
Earnings: NSLP closed a deal in June, in which it bought the assets of 2 Oilfield Services companies, EFS and RPS, which it feels will add substantially to its EBITDA generation. In fact, in its Q2 2014 earnings release, NSLP stated that, “Revenue for the oilfield services segment was $10.1 million for the second quarter of 2014. Including EFS and RPS historical results of operations from the effective date of 4/1/14, revenue for the oilfield services segment would have been $39.2 million for the second quarter of 2014.”
So, these 2 new companies should quadruple NSLP’s Oilfiled Service revenue, which will greatly improve its distribution coverage, even with future distribution increases. It will also help mitigate the effect of future share dilution, when NSLP acts upon the $50M common unit sale distribution agreement it recently announced with BMO Capital Markets.
Here’s a comparison of NSLP’s Revenue & EBITDA guidance for the 2nd half of 2014, vs. its actual figures from the 2nd half of 2013 – the growth should be huge:
NSLP-2NDHALF-EBITDA
OCIR: On OCIR’s Q2 2014 earnings release, Kirk Milling, CEO, commented, “we are on pace for record setting production volumes in the year. As we move into the second half of the year, our volumes will be higher as the fourth quarter is typically our strongest quarter of the year.”
Valuations: These Valuation and Financials tables aren’t meant for comparing these 2 very different companies, but rather, are just to provide you with more info on them. Thanks to its growth prospects, NSLP’s sports a very low P/E.
NSLP-OCIR-PB
Financials: OCIR has very strong Mgt. Efficiency ratios and Current Liability coverage:
NSLP-OCIR-ROE
Disclosure: Author owned shares of NSLP and OCIR at the time of this publication
Disclaimer: This article was written for informational purposes only. Author not responsible for any errors or omissions.

This Brand New High Dividend Stock Offers Good Price Gain Potential And A 6.7% Dividend Yield

By Robert Hauver
Who says you can’t have it both ways? Preferred stocks, often pooh-poohed as being stodgy, with minimal price gains, are having a good year in 2014, with many issues outperforming the market via price gains alone.
If you want well-covered dividend income, but, also some potential for price gains, you ought to consider buying the newest preferred shares issued by CHS Inc., (CHSCM), a large cooperatively-owned Midwestern US company which deals in both Energy and Agriculture.
CHS is a bit different from most publicly traded companies – they don’t have common stock. Instead, they issue preferred shares, which trade on the NASDAQ.
Profile: CHS Inc. is a globally integrated Fortune 100 company supplying energy, crop nutrients, grain marketing services, animal feed, insurance, financial & risk management services and food & food ingredients. CHS employs over 10,000 people across North America and in 24 other countries around the globe.
CHS is committed to a cooperative business model, as reflected by its ownership, made up of 600,000 producers, the majority whom are throughout 1,100 member cooperatives and 77,000 are served through CHS local service centers. CHS also has 16,000 preferred stockholders. (CHS doesn’t have any common shares). The company is governed by a 17-member board of farmers and ranchers, who are elected by its cooperative-owners and producer-owners.

Dividends: We’ve had our sights on CHSCP for years, having listed it in our High Dividend Stocks By Sector Tables, (and all of the CHS preferred shares are now listed in the Consumer Staples section). The thing is, we’ve never been able to buy any of its shares near their $25 liquidation price, due to price gains on them…until now.
Last week, CHS issued its newest series of preferred shares – 6.75% Class B Reset Rate Cumulative Redeemable Preferred Stock Series 3. Luckily, they’re still trading near $25, under the ticker symbol CHSCM.
The phrase “Reset Rate” is part of their description, because, after 9/30/24, CHS will reset the dividend rate “at an annual rate equal to three-month LIBOR, as determined for the applicable quarterly period, plus a spread of 4.155%, but in no event will the sum of such annual rate and spread be greater than 8% per annum.”
(Source: CHS website)
CHS-DIV

All of CHS’s preferred shares qualify for the 15 to 20% lower tax rate, and they’re also cumulative, meaning that, CHS must pay you any skipped dividends when it calls these shares in.
CHS’s previous preferred dividend stocks have had good price gains, which coupled with their high dividends, have produced attractive returns. Please note, though, that, unlike the other 3 issues, CHSCP is already past its call date, so there’s a price risk there, if it gets called, since it’s $5.52 over its $25 liquidation price.

CHS-GAINS

Long term future yields: Even though CHSCM’s dividend coupon rate of 6.75% is lower than that of CHSCN, (7.10%), and CHSCO, (7.875%), your ability to buy at or close to $25 more than compensates for this in the long term.
Three of these issues are callable far out into the future – 2023 to 2024, but with CHSCO trading at $28.40, $3.40 over the $25 liquidation price, and CHSCN at $26.53, $1.53 above $25, CHSCM currently offers the best long term yield, in addition to potential future price gains:
CHS-LIQYIELDS

Options: Our Covered Calls Table and Cash Secured Puts Table don’t feature any CHS options trades. Since CHS has no common shares, there are no options available yet.
Earnings: Here’s a breakdown of CHS’s revenues and pre-tax earnings by segment. Although its Agriculture segment contributed over 71% of total revenue, 75% of CHS’s pre-tax income came from its smaller Energy division in 2013. This is way up from 2011, when the Energy division only contributed 55% of pre-tax income. In 2012, this figure was 73%. (CHS’s fiscal year ends on August 31st.)
CHS-SEGMENTS
CHS had a bang-up year in 2012, recording record revenues and profits. Fiscal 2013 saw more record revenues, but pre-tax income declined in the Energy segment, mainly due to a major maintenance turnaround at its Laurel, Montana refinery, and declines in its propane business. In 2013, the Agriculure division suffered reduced export grain marketing margins as a result of the 2012 severe drought that affected the 2012 U.S. crop.
CHS-SEGMT-2013V2012-2011
Looking back further, CHS management shows a strong history of returning cash to shareholders, having grown its cash payouts 153%, to $598.9 million in 2013, from $237 million in 2010:
CHS-CashReturns-ROE
Extremely well-covered dividends: Even with the ups and downs associated with Energy and Agriculture, CHS’s coverage of its preferred dividend payouts is impressive, and offers a huge safety net to shareholders. Indeed, you’d probably be hard-pressed to find coverage of 39x among many preferred dividend paying stocks:
CHS-PREF-DIV-COVG
Dependable Dividends, Even In Bad Conditions: CHS steadily paid its preferred dividends to shareholders of its oldest series, CHSCP, right through the financial crisis, never missing a quarter.
All tables furnished by DoubleDividendStocks.com, unless otherwise noted.
Disclosure: Author owned shares of CHSCM at the time of this publication
Disclaimer: This article was written for informational purposes only. Author not responsible for any errors or omissions.

3 High Yield Plays On Outperforming Energy High Dividend Stocks

by Robert Hauver
The Energy sector continues to lead all other sectors in 2014. As of 7/16/14, this sector, as measured by the XLE etf, was up 12.73% year to date, vs. 7.16% for the S&P500, and only 3.3% for the DOW. The XLE etf is dominated by large cap dividend stocks, such as Conoco Phillips, (COP), which is its 4th largest holding, after Exxon, Chevron, and Schlumberger.
When looking at performance, however, the majors, such as Exxon and Chevron, have greatly underperformed independent Conoco, which is up over 22% so far in 2014, vs. gains of only 5.2% for Chevron and 2.6% for Exxon.
COP also has the second highest dividend yield in the group, at 3.39%, having just raised its quarterly dividend from $.69 to $.73.
We screened for other dividend paying independent oil & gas stocks, to see if there are some other worthwhile outperformers in that sub-industry. We came up with Delek Logistics LP, (DKL), a relatively new, (NOV 2012 IPO),small cap high dividend stock, which we recently added to our High Dividend Stocks By Sectors Tables.

Dividends/Distributions: After spinning off its refining division, Phillips 66 (PSX), in 2012, COP has gone from paying $.66 to $.69, and now $.73 a quarter. DKL has raised its quarterly distribution 5 straight times since its IPO.
COP-DKL-DIV

Options: Although COP just went ex-dividend, you can still earn an attractive options yield on it, via selling November 2014 covered calls, which will also allow you to either capture the next quarterly dividend, in October, or get paid even more $ if your shares get assigned. DKL has a much higher option yield, but its shares are much closer to its strike price.
Our free Covered Calls Table, which is updated daily, offers more info for this and over 30 other call trades:
COP-DKL-CALL
Here are the 3 major scenarios for the DKL call trade:
DKL-CALLINC

With COP up over 22% in 2014, a more cautious strategy is to sell cash secured puts, at a strike price below its share price. This Nov. 2014 $85 put option trade offers an 11%-plus annualized yield, and a breakeven of $81.70. The $3.30 put premium you’d receive is over 4 times COP’s next $.73 quarterly dividend.
You can see more info for this and over 30 other put trades, in our Cash Secured Puts Table.
COP-PUT

Earnings: DKL looks undervalued on a PEG 2014 basis, but not on a 2015 PEG basis:
DKL-PEG
COP has a higher 2014 PEG, but it is still below 1, and indicates some undervaluation. However, analysts are forecasting slight EPS contraction of -.15% in 2015:
COP-PEG
Valuations: DKL currently has a negative book value, but this is due to non-cash depreciation charges.
COP-DKL-PB
Financials:
COP-DKL-ROE

Performance:
COP-DKL-PERF
Disclosure: Author owned no shares of COP or DKL 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.

3 Energy Sector High Dividend Stocks Outperforming In 2014

by Robert Hauver
After rising nearly 24% in 2013, the Energy sector continues to be a winner in 2014, having risen 6.69% as of May 21, 2014. But how have dividend stocks within this sector fared? As it turns out, there are 3 winners from the Energy section of our High Dividend Stocks by Sector Tables, that have handily outperformed the market as a whole, and whose performance has also beaten the Energy sector’s by a long shot in 2014.
These 3 energy stocks are all LP’s, which offers you additional benefits – LP’s must pay out 90% of their earnings, in return for not paying taxes, which often results in a high dividend yield; and tax efficiency, since the high yield distributions that you receive will be partially sheltered, via offsets, such as depreciation, on the K-1 form you’ll receive at tax time.
The full company profiles are at the bottom of this article.
Here’s how these stocks have fared in 2014 and over the past trading month. Compare this with the S&P, which was up 2.15% year-to-date, as of 5/21/14, and up 13.11% over the past year:
GLPTLP-PERF
Dividends: All 3 of these stocks yield over 5%, (GLP yields over 6%), and go ex-dividend in late July/Early August. They’ve all steadily raised their dividends over the past 5 years. Coverage-wise, GLP leads the pack, with a 2.6x distribution coverage ratio. (LP’s refer to their dividends as distributions, and their shares as units.)
GLPTLP-DIV
Options: We haven’t added any options trades to our Covered Calls Table, or to out Cash Secured Puts Table yet, since the options for these 3 dividend stocks aren’t currently that attractive. Given the market support they’ve been getting, you’d most likely do much better with the dividend income and potential price gains.
To read more of this article, please click here.

Disclosure: Author was long shares of Global Partners, GLP, 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.

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.