AMAT Dividend

APPLIED MATERIALS dividend

Although AMAT has a dividend of 0.20 with an ex-dividend date of Nov 21, you can sell covered calls on APPLIED MATERIALS to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 1:10 PM ET):

APPLIED MATERIALS (AMAT)
Bid Ask Last Change Volume P/E Market Cap
39.00 39.01 39.01 -0.18 4.6M 12 39B

AMAT Dividend-Like Income Using Covered Calls

With AMAT at 39.01, 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% 1.17 0.3
5% 1.95 0.5
10% 3.90 1.1

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 AMAT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 41.50 0.01 3 0.3 2.49 (6.4%)
Sep 28 41.50 0.05 10 0.5 2.49 (6.4%)
5% Yield On AMAT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 41.00 0.02 3 0.7 1.99 (5.1%)
Sep 28 41.00 0.09 10 0.9 1.99 (5.1%)
10% Yield On AMAT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 40.00 0.07 3 2.3 0.99 (2.5%)
Sep 28 40.50 0.16 10 1.6 1.49 (3.8%)

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Want more examples? AMAG Dividend | AMBA Dividend