ADNT Dividend

Although ADNT has a dividend of 0.28 with an ex-dividend date of Oct 23, you can sell covered calls on ADIENT PLC 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):

ADIENT PLC (ADNT)
Bid Ask Last Change Volume P/E Market Cap
29.01 33.50 29.72 -1.02 1.3M 177 2.9B

ADNT Dividend-Like Income Using Covered Calls

With ADNT at 29.72, 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% 0.89 0.2
5% 1.49 0.4
10% 2.97 0.8

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 ADNT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 38.00 0.10 30 0.3 4.50 (15.1%)
Dec 21 39.00 0.20 65 0.3 5.50 (18.5%)
5% Yield On ADNT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 37.00 0.15 30 0.5 3.50 (11.8%)
Dec 21 37.00 0.35 65 0.5 3.50 (11.8%)
10% Yield On ADNT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 35.00 0.30 30 1.0 1.50 (5.0%)
Dec 21 35.00 0.60 65 0.9 1.50 (5.0%)

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