Two Industrial Dividend Stocks With 30% Covered Call Yields

Posted on August 10, 2012

Standard Motor Products, (SMP), and Worthington Industries, (WOR), are both on a roll this summer, having rallied significantly since the June 4th lows:

Dividends: SMP goes ex-dividend next week, and WOR goes ex- in early September:

Covered Calls: As you may have noticed on the 2 charts above, both SMP and WOR are currently showing as being overbought on their respective stochastic charts. This overbought condition often offers the best covered call option yields, and also helps to lock in some of your profits. Both of these dividend stocks currently have very high options yields for their covered calls.

Here are are 2 trades from our Covered Calls Table:

Even though SMP and WOR aren’t high dividend stocks, their options pay out over 6 times their dividend amounts in these 2 trades. The WOR covered call is in the money, with a strike price that’s slightly lower than SMP’s $22.53 price per share. The SMP price is above SMP’s price per share, and thus offers an potential assigned yield of 7.64%, ($.34/share difference between the $17.50 strike price, and SMP’s $17.16 share price.) The SMP is a longer term trade, expiring on November, hence its lower annualized yield:

Disclosure: Author had no positions in any of the stocks mentioned in this article at the time of this writing.

Disclaimer: This article is written for informational purposes only and isn’t intended as investment advice.

Cummins Is Bouncing Back But Is Still Undervalued

Posted on August 3, 2012

by Robert Hauver

If you’re looking for dividend stocks that bounce back and forth in a trading range, Cummins may be one of the best stocks to buy or trade for this attribute.

Cummins, (CMI), had a rough time after lowering its 2012 revenue forecast on July 10th, down to flat, from a previous 10% estimate. CMI shares reached as low as $82.20, but since then, have rallied nearly 18%:

Click here to read more…

Disclosure: Author was short CMI put options at the time of this writing.

Disclaimer: This article is written for informational purposes only and isn’t intended as investment advice.

3 Basic Materials Dividend Stocks Trouncing The Market

Posted on July 28, 2012

By Robert Hauver

Basic Materials had been getting pummeled in 2012, for a number of reasons, chiefly the slowdown in the world economy, particularly China, and a strong dollar. This sector is the worst performing sector so far, down 0.6% in 2012:

However, over the past month, this sector has outperformed all others, thanks to a falling dollar, and renewed stimulus from the Chinese government. Click here to read more…

Standard Motor Parts Has Very High Options Yields

Posted on July 20, 2012

Standard Motor Parts, (SMP), had been beaten up after its disappointing 2nd quarter earnings release on May 3rd, but the market has gotten much more revved up about this Industrial dividend stock this summer. SMP received an analyst upgrade in early June, which certainly helped its share price:

Maybe this is why – even after its recent price gains, SMP still looks very undervalued on PEG basis.

Click here to read more…

Disclaimer: This article is written for informational purposes only and isn’t intended as investment advice.

Worthington Industries Is On A Roll

Posted on July 13, 2012

by Robert Hauver

Looking for dividend stocks with market support?

Steel and Metal processor Worthington Industries, (WOR), has been on a roll since the June 4th lows, rising over 42%, vs. the S&P, which has gained approx. 6%. This dividend stock has done better than the Steel & Iron industry, which is up approx. 4% since June 4th, but is still down 9% for the year, vs. WOR’s big 36.72% gain:

Earnings Growth: A big part of the attraction for WOR stems from its EPS growth figures, which show it to still be undervalued on a PEG basis for next year’s earnings: Click here to read more…

Disclosure: Author had no positions in WOR at the time of this writing.

Disclaimer: This article is written for informational purposes only and isn’t intended as investment advice.

Halliburton – An Undervalued Blue Chip Dividend Stock

Posted on July 6, 2012

By Robert Hauver

Looking for undervalued dividend stocks? Energy stocks have emerged as the Rodney Dangerfields of the market in 2012, being the only sector that’s still down, (-2.92%), after this new summer rally. However, the sector has pulled an impressive reversal, gaining over 8% since the June 4th lows. Halliburton, however, hasn’t joined in the fun yet, losing -1.52% since June 4th, and is now down almost 14% year-to-date, as of 7/6/12:

HAL-PERF

In addition to being in an out of favor sector, Halliburton’s 2012 earnings are flat, but, if you look to 2013, the picture gets brighter – HAL’s EPS is estimated to grow at over 10%. Couple this with its historically low range P/E of 8.72, and you have undervalued growth. We also ran a discounted model for future Earnings growth, with a risk-free rate of 13%, and came up with an intrinsic value of $61.00 for Halliburton.

HAL-PEG

Option trading strategies vs. dividends: Although HAL isn’t listed in our High Dividend Stocks By Sector Tables, it does have some high options yields.

The covered call trade listed below expires in October, and offers a call option premium of $1.68, over 18 times the dividend amount. Since the $30.00 strike is $.93 over HAL’s current strike price, there’s an additional potential assigned yield of over 11% annualized.

Click here to read more…

Disclaimer: This article is written for informational purposes only and isn’t intended as investment advice.

Schlumberger Just Sent A Buy Signal

Posted on June 29, 2012

By Robert Hauver

Buy Signal- Schlumberger dipped below the oversold 20 line on its Stochastic chart, but just crossed back above the line this week, which is seen by chartists as a buy signal:

SLB-CHART

Schlumberger, (SLB), is the world’s largest oilfield services provider, whose $83 billion market cap dwarfs those of its competitors, such as Halliburton and Baker Hughes. Like most Basic Materials/Energy-related stocks, SLB has been getting hammered this year, due to a number of factors – slowing Chinese and US growth, Eurozone problems, and declining oil prices. However, the oil price decline is a 2-edged sword, because some of that decline is due to the new shale oil discoveries that are being exploited via fracking in the US, which is Schlumberger’s biggest and most lucrative market:

Click here to read more…

Disclaimer: This article is written for informational purposes only and isn’t intended as investment advice.

VF Corp, A Dividend Stock WIth A 20% Option Yield

Posted on June 22, 2012

By Robert Hauver

VF Corp., (VFC), has been one of the best stocks to buy this year for price gains, having outperformed the market thus far in 2012, and is only 9.06% off of its 52-week highs.VFC is among the top 20 Consumer Goods dividend stocks for 2012 performance.

VFC is a $9 billion apparel and footwear powerhouse, with a very diverse, international portfolio of brands and products, including such well known brands as Lee, Nautica, Wrangler, North Face, and Timberland.

VFC-BETA

With its 2.06% dividend yield, VFC isn’t really part of the high dividend stocks universe, but you can vastly improve upon its dividends by selling covered calls or cash secured puts.

Here’s a covered call trade for VFC, that’s listed in our Covered Call Table, along with over 30 other trades with high options yields. Click here to read more…

Disclaimer: This article is written for informational purposes only and isn’t intended as investment advice.

2 Dividend Stocks With 25% Covered Call Yields

Posted on June 15, 2012

By Robert Hauver

Looking for dividend stocks with high options yields? With the market moving more towards the upside, call option prices have started to rise accordingly. Here are 2 of the over 30 dividend paying stocks listed in our Covered Calls Table, which each have a combined option and dividend yield of 25% or more:

MGA-TGH-CALLS

Dividends: TGH, which is listed in the Industrials section of High Dividend Stocks By Sector Tables, increased its quarterly dividends to $.40, from $.37 in 2012. This was the 9th consecutive dividend increase for TGH. MGA increased its quarterly dividends to $.28, from $.25, in the first quarter of 2012.

Click here to read more…

Disclaimer: This article is written for informational purposes only and isn’t intended as investment advice.

BHP Billiton – An Undervalued Basic Materials Dividend Stock

Posted on June 8, 2012

By Robert Hauver

Looking for undervalued dividend paying stocks? Like many Basic Materials stocks, BHP Billiton PLC, (BBL), has been under under pressure in 2012, due to slowing growth and tightening financial policy in China. However, the Chinese government has begun loosening its policies, in order to keep growth moving near their targeted 7.5% GDP rate, which should help Basic Materials stocks such as BBL regain some of their luster.

Undervalued Growth: BBL, whose fiscal year ends 6/30/12, looks undervalued on a PEG basis for 2012 and 2013:

Click here to read more…

Disclaimer: This article is written for informational purposes only and isn’t intended as investment advice.