Capital Power: Generating Low Risk 15% Yields With Covered Calls

(7min)

Summary

  • Capital Power's common shares were previously overvalued, and we suggested that investors dive into the preferred shares.
  • The trade worked, with the preferreds outperforming by 24% since then.
  • With a 6% dividend yield and attractive valuation metrics, CPX:CA offers a compelling opportunity, especially with well-priced options for risk-adjusted returns.

Alberta Canada countryside

Don White

Note: All amounts referenced are in Canadian Dollars. The stock prices referenced are the ones trading on the TSX. No reference is made to the OTC tickers.

On our previous coverage of Capital Power (TSX:CPX:CA), we

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