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6 Low-Yield Dividend Captures

Legg Mason, Inc. (LM - Get Report)

Legg Mason, Inc., through its subsidiaries, operates as an asset management company worldwide. The company was founded in 1899 and is headquartered in Baltimore.
Yield: 1.88%
Dividend Amount: 11 cents
Ex-Dividend Date: June 8, 2012
Beta: 1.80


Buy Legg Mason stock and offer to sell the June $23.00 strike or lower call for 66 cents over the intrinsic value.

After qualifying for the dividend, I will look to close out the covered option with a gain of about 46 cents, plus the dividend received.

I don't want the option hedge unless the sale will provide at least the minimum 66 cents over intrinsic value. The value in this trade is the combination of option premium and dividend received. One or the other on its own isn't very attractive.

At the time of publication, the author did not hold a position in any securities mentioned.
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BAX $36.91 1.99%
CCE $47.57 -0.10%
FTR $4.17 -3.47%
LM $26.16 0.89%
PX $103.37 -0.43%


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