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Ripe Dividend-Stock Picks: TIF, LVS, XEL, HNZ

It's hard to make a case for buying the stock outright at this time, when an investor can capture most/all of any upside while limiting total losses to less than 10% of a stock movement by buying an option instead.

If you want the dividend, you can simply close out of the option position by either selling it (and buying shares), or an option exercise, whichever makes most financial sense the day before Heinz trades ex-dividend.

Tiffany & Co. (TIF - Get Report)
Tiffany, through its subsidiaries, engages in the design, manufacture and retail of fine jewelry worldwide. The company was founded in 1837 and is headquartered in New York city.
Yield: 2.27%
Dividend Amount: 32 cents
Ex-Dividend Date: June 18, 2012
Beta: 1.82

Strategy: Buy Tiffany stock and offer to sell the June $52.50 strike or lower call for 52 cents over the intrinsic value. For a more aggressive approach, sell the June $55 strike for 85 cents over intrinsic value.

I like Tiffany for several reasons. Tiffany just came off a tough quarter; however, most of the negative news was already priced in it. The stock gapped lower, essentially putting Tiffany on sale. Sales in China are strong and lower commodity prices (think gold and other metals) result in lower cost inputs for products sold. Also, lower energy prices increases disposable income, which should increasingly have a bullish impact with both top and bottom lines, moving forward.

If my shares are called away before trading ex-dividend (resulting from the option buyer wanting the dividend), I gain about 52 cents. The most I can make is 84 cents, if I hold the covered call through option expiration day and the stock gets called away.

Las Vegas Sands (LVS - Get Report)
Las Vegas Sands, together with its subsidiaries, owns, develops and operates various integrated resort properties primarily in the United States, Macau and Singapore. The company was founded in 1988 and is based in Las Vegas.
Yield: 2.09%
Dividend Amount: 25 cents
Ex-Dividend Date: June 18, 2012
Beta: 3.68

Strategy: Buy Las Vegas Sands stock and offer to sell the June $45 strike or lower call for 40 cents over the intrinsic value.

The gaming industry is one I follow closely. I make the trip to Vegas often to walk the floors and count heads (Aside from a little -- if any -- poker, I don't gamble). I have done the same in Macau as well.
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SYM TRADE IT LAST %CHG
HNZ $72.49 0.00%
LVS $56.04 0.00%
TIF $95.70 0.00%
XEL $34.67 0.00%
AAPL $121.30 0.00%

Markets

Chart of I:DJI
DOW 17,689.86 -56.12 -0.32%
S&P 500 2,103.84 -4.79 -0.23%
NASDAQ 5,128.2810 -0.5040 -0.01%

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