AB Dividend

AllianceBernstein Holding L.P. Units dividend

Although AB has a dividend of 0.80 with an ex-dividend date of May 5, you can sell covered calls on AllianceBernstein Holding L.P. Units to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 1:15 PM ET):

AllianceBernstein Holding L.P. Units (AB)
Bid Ask Last Change Volume P/E Market Cap
39.00 39.13 39.10 -0.13 120K 10 4.3B

AB Dividend-Like Income Using Covered Calls

With AB at 39.10, 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% 1.17 0.3
5% 1.96 0.5
10% 3.91 1.1

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 AB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 40.00 1.50 171 0.9 0.87 (2.2%)
Jul 18 40.00 0.95 80 1.2 0.87 (2.2%)
5% Yield On AB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 40.00 1.50 171 0.9 0.87 (2.2%)
Jul 18 40.00 0.95 80 1.2 0.87 (2.2%)
10% Yield On AB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 18 40.00 0.95 80 1.2 0.87 (2.2%)

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