FE Dividend

Although FE has a dividend of 0.45 with an ex-dividend date of May 7, you can sell covered calls on FirstEnergy Corp. to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 10:20 AM ET):

FirstEnergy Corp. (FE)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
42.20	42.22	42.21	-0.13	435K	25	24B

FE Dividend-Like Income Using Covered Calls

With FE at 42.21, 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%	1.27	0.3
5%	2.11	0.6
10%	4.22	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 FE Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 16	43.00	0.25	19	1.3	0.78 (1.8%)
Oct 17	43.00	1.80	173	1.0	0.78 (1.8%)

5% Yield On FE Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 16	43.00	0.25	19	1.3	0.78 (1.8%)
Oct 17	43.00	1.80	173	1.0	0.78 (1.8%)

10% Yield On FE Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 16	43.00	0.25	19	1.3	0.78 (1.8%)
Jun 20	43.00	0.70	54	1.3	0.78 (1.8%)

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