SDLP announced today it is cutting its quarterly distribution from 25 cents to 10 cents.
music selection: “Everlong” — Foo Fighters
Previously, on 18JUL2016 I sold SDLP160819P00005000 for 6 cents a share. That trade will yield 13.27% annualized. The distribution cut news caused the stock to fall a hair over 30% today and I am currently in the money. I expect to get assigned and have a cost basis of five dollars. With the distribution at 40 cents a year, my yield on cost will be 8%. I’m happy with that yield as I can write covered calls for bonus yield. Seadrill Partners is a strong company and its distribution will eventually be back. That is the power of writing puts on companies you’d like to own at a great price.
Devour your prey raptors!