AEP Dividend Type Payments

American Electric Power Co, Inc dividend

Although AEP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on American Electric Power Co, Inc 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):

American Electric Power Co, Inc (AEP)
Bid Ask Last Change Volume P/E Market Cap
91.09 92.19 91.55 +0.68 3.2M 22 45B

AEP Dividend-Like Income Using Covered Calls

With AEP at 91.55, 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% 2.75 0.8
5% 4.58 1.3
10% 9.16 2.5

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 AEP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 19 95.00 0.30 29 1.0 2.81 (3.1%)
Aug 16 95.00 0.80 57 1.4 2.81 (3.1%)
5% Yield On AEP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 19 92.50 1.00 29 3.4 0.31 (0.3%)
Aug 16 95.00 0.80 57 1.4 2.81 (3.1%)
10% Yield On AEP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 19 92.50 1.00 29 3.4 0.31 (0.3%)
Aug 16 92.50 1.70 57 3.0 0.31 (0.3%)

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Want more examples? AEO Dividend | AER Dividend