AIG Dividend

American International Group, Inc. New dividend

Although AIG has a dividend of 0.45 with an ex-dividend date of Jun 13, you can sell covered calls on American International Group, Inc. New 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 International Group, Inc. New (AIG)
Bid Ask Last Change Volume P/E Market Cap
83.15 88.98 83.66 +2.82 5.6M - 48B

AIG Dividend-Like Income Using Covered Calls

With AIG at 83.66, here's a table showing how big the annual "dividend" (i.e. 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% 2.51 0.7
5% 4.18 1.1
10% 8.37 2.3

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 AIG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 6 89.00 0.30 36 0.8 0.02 (0.0%)
Aug 15 90.00 1.55 106 1.5 1.02 (1.2%)
5% Yield On AIG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 90.00 1.55 106 1.5 1.02 (1.2%)
Sep 19 90.00 2.25 141 1.6 1.02 (1.2%)

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