AAP Dividend Type Payments

Advance Auto Parts, Inc W/I dividend

Although AAP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Advance Auto Parts, Inc W/I to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 3:45 PM ET):

Advance Auto Parts, Inc W/I (AAP)
Bid Ask Last Change Volume P/E Market Cap
158.70 158.72 158.71 +0.13 370K 27 11B

AAP Dividend-Like Income Using Covered Calls

With AAP at 158.71, 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% 4.76 1.3
5% 7.94 2.2
10% 15.87 4.3

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 AAP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 19 165.00 0.10 5 2.0 6.28 (4.0%)
Aug 16 180.00 0.55 33 1.7 21.28 (13.4%)
5% Yield On AAP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 19 160.00 1.00 5 20.0 1.28 (0.8%)
Aug 16 175.00 1.10 33 3.3 16.28 (10.3%)
10% Yield On AAP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 19 160.00 1.00 5 20.0 1.28 (0.8%)
Aug 16 170.00 2.10 33 6.4 11.28 (7.1%)

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Top 10 Open Interest For Jul 19 Expiration     Top 5 High Yield
1.SPY dividend 6.OIH dividend   1.BFR dividend
2.SPX dividend 7.FXI dividend   2.SKX dividend
3.EEM dividend 8.USO dividend   3.OSTK dividend
4.QQQ dividend 9.AAPL dividend   4.NFLX dividend
5.IWM dividend 10.EWZ dividend   5.CRWD dividend

Want more examples? AAON Dividend | AAPL Dividend