AMWD Dividend Type Payments

Although AMWD has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on AMERICAN WOODMARK to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 12:20 PM ET):

AMERICAN WOODMARK (AMWD)
Bid Ask Last Change Volume P/E Market Cap
64.86 64.91 64.85 -1.56 77K 17 1.2B

AMWD Dividend-Like Income Using Covered Calls

With AMWD at 64.85, 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% 1.95 0.5
5% 3.24 0.9
10% 6.49 1.8

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 AMWD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 75.00 0.50 30 1.7 10.09 (15.6%)
Jan 18 90.00 0.50 93 0.5 25.09 (38.7%)
5% Yield On AMWD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 75.00 0.50 30 1.7 10.09 (15.6%)
Jan 18 85.00 0.85 93 0.9 20.09 (31.0%)
10% Yield On AMWD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 70.00 1.50 30 5.0 5.09 (7.8%)
Jan 18 75.00 2.45 93 2.6 10.09 (15.6%)

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