BAX Dividend Type Payments

Baxter International Inc. dividend

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

Baxter International Inc. (BAX)
Bid Ask Last Change Volume P/E Market Cap
29.54 30.21 29.80 -0.12 3.3M - 15B

BAX Dividend-Like Income Using Covered Calls

With BAX at 29.80, here's a table showing how big the annual "dividend" (i.e. 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% 0.89 0.2
5% 1.49 0.4
10% 2.98 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 BAX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 3 30.50 0.05 16 0.3 0.29 (1.0%)
Aug 15 32.50 0.70 59 1.2 2.29 (7.7%)
5% Yield On BAX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 32.50 0.70 59 1.2 2.29 (7.7%)
Jul 18 32.50 0.25 31 0.8 2.29 (7.7%)
10% Yield On BAX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 32.50 0.70 59 1.2 2.29 (7.7%)
Sep 19 32.50 0.85 94 0.9 2.29 (7.7%)

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