AAP Dividend Type Payments

ADVANCE AUTO PARTS dividend

Although AAP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on ADVANCE AUTO PARTS to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):

ADVANCE AUTO PARTS (AAP)
Bid Ask Last Change Volume P/E Market Cap
138.91 150.00 139.67 +0.33 503K 20 10B

AAP Dividend-Like Income Using Covered Calls

With AAP at 139.67, 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% 4.19 1.1
5% 6.98 1.9
10% 13.97 3.8

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 AAP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 17 160.00 0.60 33 1.8 10.00 (7.2%)
Sep 21 170.00 0.80 68 1.2 20.00 (14.3%)
5% Yield On AAP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 17 155.00 1.25 33 3.8 5.00 (3.6%)
Sep 21 160.00 2.00 68 2.9 10.00 (7.2%)
10% Yield On AAP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 17 150.00 2.30 33 7.0 0.00 (0.0%)
Sep 21 155.00 3.00 68 4.4 5.00 (3.6%)

Want to increase dividends with covered calls?  Sign Up For A Free Trial

 
Top 10 Open Interest For Jul 20 Expiration     Top 5 High Yield
1.SPY dividend 6.SPX dividend   1.AAPL dividend
2.EEM dividend 7.MU dividend   2.NFLX dividend
3.XLF dividend 8.T dividend   3.SKX dividend
4.BAC dividend 9.QQQ dividend   4.IQ dividend
5.EWZ dividend 10.FXI dividend   5.HUYA dividend

Want more examples? AAON Dividend | AAPL Dividend