ADP Dividend Type Payments

AUTOMATIC DATA PROCESSING dividend

Although ADP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on AUTOMATIC DATA PROCESSING 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):

AUTOMATIC DATA PROCESSING (ADP)
Bid Ask Last Change Volume P/E Market Cap
140.71 147.21 143.41 +0.49 1.5M 39 63B

ADP Dividend-Like Income Using Covered Calls

With ADP at 143.41, 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% 4.30 1.2
5% 7.17 2.0
10% 14.34 3.9

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 ADP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 26 149.00 0.10 8 1.3 1.79 (1.2%)
Nov 2 155.00 0.30 15 2.0 7.79 (5.4%)
5% Yield On ADP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 26 148.00 0.20 8 2.5 0.79 (0.6%)
Nov 2 155.00 0.30 15 2.0 7.79 (5.4%)
10% Yield On ADP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 2 152.50 0.60 15 4.0 5.29 (3.7%)
Nov 9 150.00 1.35 22 6.1 2.79 (1.9%)

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Top 10 Open Interest For Nov 16 Expiration     Top 5 High Yield
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Want more examples? ADNT Dividend | ADR Dividend