SWK Dividend

Stanley Black & Decker, Inc. dividend

Although SWK has a dividend of 0.82 with an ex-dividend date of Nov 29, you can sell covered calls on Stanley Black & Decker, 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):

Stanley Black & Decker, Inc. (SWK)
Bid Ask Last Change Volume P/E Market Cap
85.00 86.53 85.45 -0.37 1.5M - 13B

SWK Dividend-Like Income Using Covered Calls

With SWK at 85.45, 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% 2.56 0.7
5% 4.27 1.2
10% 8.55 2.3

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 SWK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 20 87.50 1.80 36 5.0 0.97 (1.1%)
Jan 17 87.50 2.70 64 4.2 0.97 (1.1%)
5% Yield On SWK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 20 87.50 1.80 36 5.0 0.97 (1.1%)
Jan 17 87.50 2.70 64 4.2 0.97 (1.1%)
10% Yield On SWK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 20 87.50 1.80 36 5.0 0.97 (1.1%)
Jan 17 87.50 2.70 64 4.2 0.97 (1.1%)

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