ABX Dividend

BARRICK GOLD dividend

Although ABX has a dividend of 0.03 with an ex-dividend date of Aug 30, you can sell covered calls on BARRICK GOLD 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):

BARRICK GOLD (ABX)
Bid Ask Last Change Volume P/E Market Cap
9.99 10.05 10.02 +0.16 17.1M - 12B

ABX Dividend-Like Income Using Covered Calls

With ABX at 10.02, 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% 0.30 0.1
5% 0.50 0.1
10% 1.00 0.3

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 ABX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 11.00 0.01 8 0.1 0.95 (9.5%)
Aug 31 10.00 0.25 15 1.3 0.00 (0.0%)
5% Yield On ABX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 10.00 0.19 8 1.8 0.00 (0.0%)
Aug 31 10.00 0.25 15 1.3 0.00 (0.0%)
10% Yield On ABX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 10.00 0.19 8 1.8 0.00 (0.0%)
Aug 31 10.00 0.25 15 1.3 0.00 (0.0%)

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