SUM Dividend Type Payments
Although SUM has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Summit Materials, Inc. Class A to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 3:10 PM ET):
| Summit Materials, Inc. Class A (SUM) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 48.42 |
48.45 |
48.44 |
-0.08 |
220K |
59 |
8.5B |
SUM Dividend-Like Income Using Covered Calls
With SUM at 48.44, 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% |
1.45 |
0.4 |
| 5% |
2.42 |
0.7 |
| 10% |
4.84 |
1.3 |
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 SUM Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
50.00 |
1.10 |
32 |
3.4 |
1.55 (3.2%) |
| May 16 |
50.00 |
3.60 |
179 |
2.0 |
1.55 (3.2%) |
| 5% Yield On SUM Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
50.00 |
1.10 |
32 |
3.4 |
1.55 (3.2%) |
| May 16 |
50.00 |
3.60 |
179 |
2.0 |
1.55 (3.2%) |
| 10% Yield On SUM Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
50.00 |
1.10 |
32 |
3.4 |
1.55 (3.2%) |
| May 16 |
50.00 |
3.60 |
179 |
2.0 |
1.55 (3.2%) |
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