AWK Dividend Type Payments

American Water Works Co, Inc dividend

Although AWK has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on American Water Works Co, Inc 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):

American Water Works Co, Inc (AWK)
Bid Ask Last Change Volume P/E Market Cap
108.05 113.72 113.69 +0.37 656K 36 20B

AWK Dividend-Like Income Using Covered Calls

With AWK at 113.69, 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% 3.41 0.9
5% 5.68 1.6
10% 11.37 3.1

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 AWK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 21 115.00 1.20 29 4.1 1.28 (1.1%)
Jul 19 115.00 2.05 57 3.6 1.28 (1.1%)
5% Yield On AWK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 21 115.00 1.20 29 4.1 1.28 (1.1%)
Jul 19 115.00 2.05 57 3.6 1.28 (1.1%)
10% Yield On AWK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 21 115.00 1.20 29 4.1 1.28 (1.1%)
Jul 19 115.00 2.05 57 3.6 1.28 (1.1%)

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