ANTM Dividend

Although ANTM has a dividend of 0.75 with an ex-dividend date of Sep 7, you can sell covered calls on ANTHEM INC to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 10:15 AM ET):

ANTHEM INC (ANTM)
Bid Ask Last Change Volume P/E Market Cap
263.87 263.95 263.89 -0.06 105K 16 69B

ANTM Dividend-Like Income Using Covered Calls

With ANTM at 263.89, 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% 7.92 2.2
5% 13.19 3.6
10% 26.39 7.2

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 ANTM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 272.50 0.11 5 2.2 8.55 (3.2%)
Aug 31 272.50 0.49 12 4.1 8.55 (3.2%)
5% Yield On ANTM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 270.00 0.31 5 6.2 6.05 (2.3%)
Aug 31 272.50 0.49 12 4.1 8.55 (3.2%)
10% Yield On ANTM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 267.50 0.77 5 15.4 3.55 (1.3%)
Aug 31 270.00 0.91 12 7.6 6.05 (2.3%)

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