AVB Dividend

Although AVB has a dividend of 1.75 with an ex-dividend date of Mar 31, you can sell covered calls on AvalonBay Communities, Inc. to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 9:40 AM ET):

AvalonBay Communities, Inc. (AVB)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
226.40	227.06	226.84	+3.82	17K	31	32B

AVB Dividend-Like Income Using Covered Calls

With AVB at 226.84, 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%	6.81	1.9
5%	11.34	3.1
10%	22.68	6.2

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 AVB Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Apr 17	230.00	3.00	49	6.1	2.94 (1.3%)
Oct 17	230.00	12.00	232	5.2	2.94 (1.3%)

5% Yield On AVB Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Apr 17	230.00	3.00	49	6.1	2.94 (1.3%)
Oct 17	230.00	12.00	232	5.2	2.94 (1.3%)

10% Yield On AVB Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Mar 21	230.00	1.40	22	6.4	2.94 (1.3%)

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Want more examples? AVAV Dividend | AVD Dividend