HDB Dividend Type Payments

HDFC Bank Limited dividend

Although HDB has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on HDFC Bank Limited 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):

HDFC Bank Limited (HDB)
Bid Ask Last Change Volume P/E Market Cap
64.15 64.84 64.26 -0.06 2.5M 59 91B

HDB Dividend-Like Income Using Covered Calls

With HDB at 64.26, 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% 1.93 0.5
5% 3.21 0.9
10% 6.43 1.8

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 HDB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 17 65.00 0.50 29 1.7 0.16 (0.2%)
Apr 17 65.00 1.80 119 1.5 0.16 (0.2%)
5% Yield On HDB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 17 65.00 0.50 29 1.7 0.16 (0.2%)
Apr 17 65.00 1.80 119 1.5 0.16 (0.2%)
10% Yield On HDB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 18 65.00 4.40 211 2.1 0.16 (0.2%)
Feb 21 65.00 1.80 64 2.8 0.16 (0.2%)

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