AVB Dividend Type Payments

AVALONBAY COMMUNITIES dividend

Although AVB has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on AVALONBAY COMMUNITIES to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):

AVALONBAY COMMUNITIES (AVB)
Bid Ask Last Change Volume P/E Market Cap
172.50 183.19 183.20 +1.88 526K 29 25B

AVB Dividend-Like Income Using Covered Calls

With AVB at 183.20, 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% 5.50 1.5
5% 9.16 2.5
10% 18.32 5.0

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 AVB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 190.00 0.55 36 1.5 6.81 (3.7%)
Oct 19 190.00 1.10 64 1.7 6.81 (3.7%)
5% Yield On AVB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 185.00 2.05 36 5.7 1.81 (1.0%)
Oct 19 185.00 2.85 64 4.5 1.81 (1.0%)
10% Yield On AVB Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 185.00 2.05 36 5.7 1.81 (1.0%)

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