DEO Dividend
Although DEO has a dividend of 1.62 with an ex-dividend date of Feb 28, you can sell covered calls on Diageo plc to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 4:16 PM ET):
| Diageo plc (DEO) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 110.35 | 111.70 | 110.49 | +0.59 | 1.2M | - | 94B |
DEO Dividend-Like Income Using Covered Calls
With DEO at 110.49, 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% | 3.31 | 0.9 |
| 5% | 5.52 | 1.5 |
| 10% | 11.05 | 3.0 |
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 DEO Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Apr 17 | 115.00 | 2.35 | 51 | 4.6 | 3.30 (3.0%) | |
| Oct 17 | 115.00 | 7.20 | 234 | 3.1 | 3.30 (3.0%) | |
| 5% Yield On DEO Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Apr 17 | 115.00 | 2.35 | 51 | 4.6 | 3.30 (3.0%) | |
| Oct 17 | 115.00 | 7.20 | 234 | 3.1 | 3.30 (3.0%) | |
| 10% Yield On DEO Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Apr 17 | 115.00 | 2.35 | 51 | 4.6 | 3.30 (3.0%) | |
| Oct 17 | 115.00 | 7.20 | 234 | 3.1 | 3.30 (3.0%) | |
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| Top 10 Open Interest For Mar 21 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | NVDA dividend | 6. | KWEB dividend | 1. | SOUN dividend | |
| 2. | SPY dividend | 7. | INTC dividend | 2. | SRPT dividend | |
| 3. | FXI dividend | 8. | QQQ dividend | 3. | BBAI dividend | |
| 4. | EEM dividend | 9. | TLT dividend | 4. | LUNR dividend | |
| 5. | IWM dividend | 10. | SLV dividend | 5. | QBTS dividend | |
Want more examples? DENN Dividend | DES Dividend
