ARNA Dividend Type Payments

ARENA PHARMACEUTICALS dividend

Although ARNA has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on ARENA PHARMACEUTICALS 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):

ARENA PHARMACEUTICALS (ARNA)
Bid Ask Last Change Volume P/E Market Cap
35.51 37.61 35.94 +0.14 624K - 1.8B

ARNA Dividend-Like Income Using Covered Calls

With ARNA at 35.94, 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% 1.08 0.3
5% 1.80 0.5
10% 3.59 1.0

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 ARNA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 31 39.00 0.09 16 0.6 1.39 (3.9%)
Sep 7 38.50 0.11 23 0.5 0.89 (2.5%)
5% Yield On ARNA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 31 39.00 0.09 16 0.6 1.39 (3.9%)
Sep 14 40.50 0.16 30 0.5 2.89 (8.0%)
10% Yield On ARNA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 31 38.50 0.19 16 1.2 0.89 (2.5%)
Sep 14 39.00 0.31 30 1.0 1.39 (3.9%)

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Want more examples? ARMK Dividend | ARNC Dividend