AA Dividend Type Payments

Alcoa Corp dividend

Although AA has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Alcoa Corp 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):

Alcoa Corp (AA)
Bid Ask Last Change Volume P/E Market Cap
28.82 29.40 28.82 -0.83 3.4M - 0.0B

AA Dividend-Like Income Using Covered Calls

With AA at 28.82, here's a table showing how big the annual "dividend" (ie. 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% 0.86 0.2
5% 1.44 0.4
10% 2.88 0.8

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 AA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 14 33.00 0.05 8 0.6 3.60 (12.5%)
Dec 21 35.50 0.05 15 0.3 6.10 (21.2%)
5% Yield On AA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 14 33.00 0.05 8 0.6 3.60 (12.5%)
Dec 21 34.00 0.10 15 0.7 4.60 (16.0%)
10% Yield On AA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 14 31.50 0.10 8 1.3 2.10 (7.3%)
Dec 21 33.00 0.15 15 1.0 3.60 (12.5%)

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Top 10 Open Interest For Dec 21 Expiration     Top 5 High Yield
1.SPY dividend 6.IWM dividend   1. dividend
2.EEM dividend 7.FXI dividend   2. dividend
3.SPX dividend 8.GE dividend   3. dividend
4.QQQ dividend 9.USO dividend   4. dividend
5.EWZ dividend 10.VXX dividend   5. dividend

Want more examples? A Dividend | AABA Dividend