BBW Dividend

Build-A-Bear Workshop, Inc. dividend

Although BBW has a dividend of 0.20 with an ex-dividend date of Nov 27, you can sell covered calls on Build-A-Bear Workshop, 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):

Build-A-Bear Workshop, Inc. (BBW)
Bid Ask Last Change Volume P/E Market Cap
34.89 37.94 36.28 -0.78 120K 11 0.5B

BBW Dividend-Like Income Using Covered Calls

With BBW at 36.28, 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% 1.09 0.3
5% 1.81 0.5
10% 3.63 1.0

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 BBW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 20 40.00 1.20 36 3.3 2.06 (5.7%)
Jan 17 40.00 1.60 64 2.5 2.06 (5.7%)
5% Yield On BBW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 20 40.00 1.20 36 3.3 2.06 (5.7%)
Jan 17 40.00 1.60 64 2.5 2.06 (5.7%)
10% Yield On BBW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 20 40.00 1.20 36 3.3 2.06 (5.7%)
Jan 17 40.00 1.60 64 2.5 2.06 (5.7%)

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