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 Fri 3:45 PM ET):

Advance Auto Parts, Inc W/I (AAP)
Bid Ask Last Change Volume P/E Market Cap
169.37 169.44 169.37 +0.63 1.0M 25 12B

AAP Dividend-Like Income Using Covered Calls

With AAP at 169.37, 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% 5.08 1.4
5% 8.47 2.3
10% 16.94 4.6

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
Mar 15 200.00 0.65 29 2.2 30.56 (18.0%)
Jun 21 210.00 2.85 127 2.2 40.56 (23.9%)
5% Yield On AAP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 195.00 1.10 29 3.8 25.56 (15.1%)
Jun 21 200.00 4.50 127 3.5 30.56 (18.0%)
10% Yield On AAP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 190.00 1.70 29 5.9 20.56 (12.1%)
Jun 21 190.00 7.00 127 5.5 20.56 (12.1%)

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Top 10 Open Interest For Mar 15 Expiration     Top 5 High Yield
1.SPX dividend 6.EWZ dividend   1.ICPT dividend
2.EEM dividend 7.GE dividend   2.ROKU dividend
3.SPY dividend 8.XOP dividend   3.KPTI dividend
4.FXI dividend 9.BAC dividend   4.VKTX dividend
5.QQQ dividend 10.JD dividend   5.BHC dividend

Want more examples? AAON Dividend | AAPL Dividend