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 Thu 11:10 AM ET):
Advance Auto Parts Inc. (AAP) | ||||||
---|---|---|---|---|---|---|
Bid | Ask | Last | Change | Volume | P/E | Market Cap |
42.85 | 42.92 | 42.85 | +1.91 | 3.7M | - | 2.4B |
AAP Dividend-Like Income Using Covered Calls
With AAP at 42.85, 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% | 1.29 | 0.4 |
5% | 2.14 | 0.6 |
10% | 4.29 | 1.2 |
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 | |
Dec 6 | 43.00 | 2.69 | 23 | 11.7 | 0.08 (0.2%) | |
Dec 13 | 43.00 | 2.72 | 30 | 9.1 | 0.08 (0.2%) |
5% Yield On AAP Using Covered Calls | ||||||
---|---|---|---|---|---|---|
Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
Dec 6 | 43.00 | 2.69 | 23 | 11.7 | 0.08 (0.2%) | |
Dec 13 | 43.00 | 2.72 | 30 | 9.1 | 0.08 (0.2%) |
10% Yield On AAP Using Covered Calls | ||||||
---|---|---|---|---|---|---|
Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
Dec 6 | 43.00 | 2.69 | 23 | 11.7 | 0.08 (0.2%) | |
Dec 13 | 43.00 | 2.72 | 30 | 9.1 | 0.08 (0.2%) |
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Top 10 Open Interest For Nov 15 Expiration | Top 5 High Yield | |||||
---|---|---|---|---|---|---|
1. | FXI dividend | 6. | IWM dividend | 1. | WULF dividend | |
2. | NVDA dividend | 7. | TLT dividend | 2. | AMAT dividend | |
3. | TSLA dividend | 8. | EEM dividend | 3. | NMRA dividend | |
4. | SPY dividend | 9. | EWZ dividend | 4. | TEM dividend | |
5. | SLV dividend | 10. | SMCI dividend | 5. | ACI dividend |
Want more examples? AAON Dividend | AAPL Dividend