On Monday, 1/23/12, I sold 1 Jul12 $42.50 Covered Call for a net deposit of $67.24 in an IRA account.  My basis for these EIX shares is now $37.94, excluding dividends received.  This transaction represents a simple return of about 1.74% and an annualized return of about 3.53% on my prior basis

 This is my second sale of Covered Calls on EIX.  I purchased EIX to increase my dividend income as well as to increase my cash flow through selling Covered Calls.  I don’t really want it called away and believe that I am pretty safe selling the $42.50 strike.

S&P continues a 12-month price target of $39.00 and a hold recommendation for EIX.  MarketEdge has an Avoid rating and a price opinion to $40.49.  The 18 Yahoo analysts have a 12-month price target of $45.00 and a recommendation of 2.0 where 1.0 is a Strong Buy and 5.0 is a Strong Sell.

I think I will be considering EIX to be a part of my core holdings and might like to own more of it but just don’t have the cash available to do so at this time.  EIX pays a decent dividend at 32.5 cents per quarter or about 3.24% on its current price.  Even better, my basis is below the current price so my yield will be even higher.