AAP Dividend

Although AAP has a dividend of 0.25 with an ex-dividend date of Jan 10, you can sell covered calls on Advance Auto Parts Inc. to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):

Advance Auto Parts Inc. (AAP)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
45.05	46.90	46.34	-1.80	1.7M	155	2.9B

AAP Dividend-Like Income Using Covered Calls

With AAP at 46.34, here's a table showing how big the annual "dividend" (i.e. total annual call premium received) would need to be to attain 3%, 5%, and 10% annual yields. Also shown is the equivalent number of cents/day necessary to achieve each yield:

Annual Yield	Annual Premium	Cents/Day
3%	1.39	0.4
5%	2.32	0.6
10%	4.63	1.3

So now we need to find out of the money covered calls that pay at least the prescribed cents/day amount of time premium. That will generate income and, because they are out of the money, leave room for some upside potential on the stock. Here are some examples:

3% Yield On AAP Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Feb 7	47.00	2.21	36	6.1	0.10 (0.2%)
Jan 10	47.00	0.64	8	8.0	0.10 (0.2%)

5% Yield On AAP Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Feb 7	47.00	2.21	36	6.1	0.10 (0.2%)
Jan 10	47.00	0.64	8	8.0	0.10 (0.2%)

10% Yield On AAP Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Feb 7	47.00	2.21	36	6.1	0.10 (0.2%)
Jan 10	47.00	0.64	8	8.0	0.10 (0.2%)

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Top 10 Open Interest For Jan 17 Expiration				Top 5 High Yield
1.	NVDA dividend	6.	SPY dividend	1.	QSI dividend
2.	SLV dividend	7.	XLF dividend	2.	RIVN dividend
3.	AAPL dividend	8.	IWM dividend	3.	QUBT dividend
4.	EEM dividend	9.	TSLA dividend	4.	QBTS dividend
5.	INTC dividend	10.	TLT dividend	5.	IONQ dividend

Want more examples? AAON Dividend | AAPL Dividend