ALV Dividend

AUTOLIV dividend

Although ALV has a dividend of 0.62 with an ex-dividend date of Aug 21, you can sell covered calls on AUTOLIV 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):

AUTOLIV (ALV)
Bid Ask Last Change Volume P/E Market Cap
91.76 91.78 91.76 +0.04 718K 25 8.0B

ALV Dividend-Like Income Using Covered Calls

With ALV at 91.76, 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% 4.59 1.3
10% 9.18 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 ALV Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 100.00 0.30 37 0.8 8.22 (9.0%)
Dec 21 105.00 1.20 128 0.9 13.22 (14.4%)
5% Yield On ALV Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 95.00 1.05 37 2.8 3.22 (3.5%)
Dec 21 100.00 2.15 128 1.7 8.22 (9.0%)
10% Yield On ALV Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 95.00 1.05 37 2.8 3.22 (3.5%)
Dec 21 95.00 3.90 128 3.0 3.22 (3.5%)

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