ALSN Dividend

ALLISON TRANSMISSION dividend

Although ALSN has a dividend of 0.15 with an ex-dividend date of Aug 17, you can sell covered calls on ALLISON TRANSMISSION to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 11:30 AM ET):

ALLISON TRANSMISSION (ALSN)
Bid Ask Last Change Volume P/E Market Cap
46.05 46.08 46.06 +0.57 309K 10 5.9B

ALSN Dividend-Like Income Using Covered Calls

With ALSN at 46.06, 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% 1.38 0.4
5% 2.30 0.6
10% 4.61 1.3

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 ALSN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 50.00 0.70 95 0.7 3.92 (8.5%)
Feb 15 50.00 1.55 186 0.8 3.92 (8.5%)
5% Yield On ALSN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 50.00 0.70 95 0.7 3.92 (8.5%)
Feb 15 50.00 1.55 186 0.8 3.92 (8.5%)

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Top 10 Open Interest For Aug 17 Expiration     Top 5 High Yield
1.SPY dividend 6.BAC dividend   1.M dividend
2.EEM dividend 7.AABA dividend   2.DBD dividend
3.QQQ dividend 8.FXI dividend   3.UVXY dividend
4.SPX dividend 9.FB dividend   4.CGC dividend
5.XLF dividend 10.GLD dividend   5.GDS dividend

Want more examples? ALSK Dividend | ALT Dividend