ADM Dividend Type Payments

Archer-Daniels Midland CP dividend

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

Archer-Daniels Midland CP (ADM)
Bid Ask Last Change Volume P/E Market Cap
39.50 40.54 40.16 -0.15 3.7M 14 23B

ADM Dividend-Like Income Using Covered Calls

With ADM at 40.16, 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% 1.20 0.3
5% 2.01 0.6
10% 4.02 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 ADM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 26 41.50 0.03 9 0.3 0.96 (2.4%)
Aug 2 43.00 0.06 16 0.4 2.46 (6.1%)
5% Yield On ADM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 26 41.00 0.13 9 1.4 0.46 (1.1%)
Aug 2 42.50 0.09 16 0.6 1.96 (4.9%)
10% Yield On ADM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 26 41.00 0.13 9 1.4 0.46 (1.1%)
Aug 2 41.50 0.26 16 1.6 0.96 (2.4%)

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