Let’s continue to manage a few more of our Triple Play Income positions today.

Kraft Heinz Co. (KHC):  38.43

The question asked about Kraft Heinz stock is it still an undervalued play in an over-hyped food supply chain market? The company is playing a lot of financial catch-up since missteps in 2018-2019 that Wall Street and investors have yet to recognize and reward with a higher share price.

On the positive side, company earnings are increasing which is helping to drive down debt levels producing a relatively strong free cash flow. After cutting their dividend early in 2021 the company has re-committed to getting back on the dividend growth track in the coming years.

Meanwhile the stock price has held its own over the last 3 months compared to other food supply chain competitors.

Consumer staple stocks and KHC is still a good place to collect premium and dividends in our Triple Play Income portfolio. Our 25 Mar 40.50 call is worth a few pennies. Let’s close it and sell another covered call.

ACTION:  Buy to close KHC 25 Mar 40.50 call for around 0.02 or less. Sell to open the KHC 14 Apr 39 call for around 0.44 and a 1.1% return.

Buy to close KHC 25 Mar 40.50 call

Sell to open KHC 14 Apr 39 call

Note:  If you are new to Triple Play Income, buy KHC at market and sell the KHC 15 Apr 39 call for around 0.40

Dow Inc. (DOW):  63.49

Dow stock is slowly climbing higher towards our recovery target of $69. The volatility in the options is giving us enough premium to roll our calls higher this week.

ACTION:  Roll the DOW 25 Mar 63 call to the 8 Apr 64 call for a net credit of around 0.40 and .6% return

Buy to close DOW 25 Mar 63 call

Sell to open DOW 8 Apr 64 call

Note: If you don’t hold a position in DOW, buy the stock at market and sell the 8 Apr 64 call.

ONEOK, Inc. (OKE):  69.03

ONEOK is the natural gas stock that has benefited from spiking natural gas prices. The stock price is close to its 52-week high of $69.90 and could be overbought. However, natural gas prices don’t look to be abating in the short-term and we will continue to trade OKE for now.

We are a bit ham strung with OKE’s switch to monthly options, but we can still sell an out of the money put for a good chunk of credit.

ACTION:  Sell to open OKE 14 Apr 67.50 put for a net credit of around 1.20 to 1.25 and a 1.8% return.

Invest Smarter,

David Durham

Triple Play Income