BAC Dividend

BANK of AMERICA CORP dividend

Although BAC has a dividend of 0.15 with an ex-dividend date of Dec 6, you can sell covered calls on BANK of AMERICA CORP to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):

BANK of AMERICA CORP (BAC)
Bid Ask Last Change Volume P/E Market Cap
27.76 27.79 27.75 0.00 45.3M 13 272B

BAC Dividend-Like Income Using Covered Calls

With BAC at 27.75, 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% 0.83 0.2
5% 1.39 0.4
10% 2.78 0.8

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 BAC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 23 28.50 0.03 5 0.6 0.71 (2.6%)
Nov 30 29.50 0.03 12 0.3 1.71 (6.2%)
5% Yield On BAC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 23 28.50 0.03 5 0.6 0.71 (2.6%)
Nov 30 29.00 0.08 12 0.7 1.21 (4.4%)
10% Yield On BAC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 23 28.00 0.16 5 3.2 0.21 (0.8%)
Nov 30 28.50 0.19 12 1.6 0.71 (2.6%)

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