SBH Dividend Type Payments
Although SBH has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Sally Beauty Holdings, Inc. (Name to be changed from Sally Holdings, 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):
| Sally Beauty Holdings, Inc. (Name to be changed from Sally Holdings, Inc (SBH) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 12.65 | 13.96 | 13.41 | -0.37 | 1.9M | 10 | 1.4B |
SBH Dividend-Like Income Using Covered Calls
With SBH at 13.41, 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% | 0.40 | 0.1 |
| 5% | 0.67 | 0.2 |
| 10% | 1.34 | 0.4 |
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 SBH Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Dec 20 | 15.00 | 0.15 | 36 | 0.4 | 1.04 (7.8%) | |
| Jan 17 | 15.00 | 0.25 | 64 | 0.4 | 1.04 (7.8%) | |
| 5% Yield On SBH Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Dec 20 | 15.00 | 0.15 | 36 | 0.4 | 1.04 (7.8%) | |
| Jan 17 | 15.00 | 0.25 | 64 | 0.4 | 1.04 (7.8%) | |
| 10% Yield On SBH Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Dec 20 | 15.00 | 0.15 | 36 | 0.4 | 1.04 (7.8%) | |
| Jan 17 | 15.00 | 0.25 | 64 | 0.4 | 1.04 (7.8%) | |
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| Top 10 Open Interest For Dec 20 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | NVDA dividend | 6. | QQQ dividend | 1. | SAVA dividend | |
| 2. | SPY dividend | 7. | XLF dividend | 2. | RKLB dividend | |
| 3. | EEM dividend | 8. | KWEB dividend | 3. | LUNR dividend | |
| 4. | FXI dividend | 9. | TLT dividend | 4. | NMRA dividend | |
| 5. | IWM dividend | 10. | KRE dividend | 5. | CRVS dividend | |
Want more examples? SBGI Dividend | SBIO Dividend
