HCI Group Exceptional Call

Sep. 24, 2019 3:34 PM ETHCI Group, Inc. (HCI)
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Dividend Investing, Long-Term Horizon, Long Only

Contributor Since 2013

I used to be in "the business" and I used to write a blog on Income Investing.  Now I spend about 2 hours a day working my portfolio to squeeze out as much income as possible.  Much of my income comes from covered call premiums. I use this blog to post some of my covered call ideas.  MoneyMadam

Summary

  • HCI has growing dividends.
  • I don't like their revenue trend.
  • Covered call yields income with short term risk.

HCI Group, symbol HCI is a dividend stock I have owned for about two years. I bought it based on the yield and dividend growth. It also has reasonable debt, but revenues are not growing.

The stock price has ranged between $36.72 and $59.32. I would like to get rid of HCI through calls. I sell calls and they have never been assigned.

Today, I sold a call that does not capture the next dividend but the total return for me if they take my shares by exercising their right to buy is quite good – 13.8%.

HCI $45 call expires October 18, 2019.

HCI October 18, 2019 $45 call

With this call I have income in mind. The premium I received is over 1%. I like that. Moreover, the duration of the call is very short. If HCI is assigned that is okay with me and if I keep it, I will continue to sell calls. If the fundamentals deteriorate such as no longer increasing the dividend, I will sell it all.

M* MoneyMadam

Disclosure: I am/we are long HCI.

Additional disclosure: With Calls

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