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An Enhanced Approach To Dividend Growth Investing

Published Wed, 12 Dec 2018 09:38:02 -0500 on Seeking Alpha

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We are dividend growth investors at heart. Recently, though, we've been experimenting with alternative approaches to generating additional income from our investing process. Other professionals tend to focus on the covered call strategy, where the investor sells call options at strike prices above the basis of a preexisting position enhancing the overall yield of that position. If the stock price rises about the call option's strike price before expiration, the shares may be called away. Otherwise, the investor keeps the shares. In both cases, the investor keeps the premium income earned from the sale of the call options.
Since we are more focused on building our portfolio by acquiring shares, we've been experimenting with the cash secured put strategy. We sell put options which gives the buyer the right to sell shares to us at an agreed upon price. We set the price to be below the current market price of the shares. If the share price stays above the put option's strike price before expiration, the buyer holds onto their shares.
However, if the price falls below the put option's strike price, we may become obligated to purchase the shares at the agreed upon... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
SIGNET JEWELERS 23.19   0.0 -12.03 1.48 6.67
TUPPERWARE BRANDS 23.84   7.7 3.10 1.08 4.20
INTERPUBLIC GROUP OF COMPANIES 22.54   14.3 1.58 0.94 4.19
LEGG MASON 33.45   0.0 -0.12 1.36 4.14
HUNTINGTON BANCSHARES 13.74   11.4 1.20 0.56 4.11
FIRST HORIZON NATIONAL 15.02   8.9 1.69 0.56 3.85
GENERAL MILLS 50.68   19.9 2.55 1.96 3.79
SUNTRUST BANKS 63.82   11.2 5.69 2.00 3.16
FRANKLIN RESOURCES 35.67   11.8 3.03 1.04 2.97
UNUM GROUP 36.25   15.3 2.37 1.04 2.86
LINCOLN NATIONAL 65.51   8.9 7.38 1.48 2.25
TJX 55.42   22.7 2.44 0.92 1.43


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