BBBY Dividend Type Payments

Bed Bath & Beyond, Inc. dividend

Although BBBY has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Bed Bath & Beyond, Inc. to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 3:40 PM ET):

Bed Bath & Beyond, Inc. (BBBY)
Bid Ask Last Change Volume P/E Market Cap
10.30 10.32 10.31 -0.80 1.6M - 0.6B

BBBY Dividend-Like Income Using Covered Calls

With BBBY at 10.31, 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% 0.31 0.1
5% 0.52 0.1
10% 1.03 0.3

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 BBBY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 3 10.50 0.85 24 3.5 0.18 (1.7%)
Oct 10 10.50 1.00 31 3.2 0.18 (1.7%)
5% Yield On BBBY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 3 10.50 0.85 24 3.5 0.18 (1.7%)
Oct 10 10.50 1.00 31 3.2 0.18 (1.7%)
10% Yield On BBBY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 3 10.50 0.85 24 3.5 0.18 (1.7%)
Oct 10 10.50 1.00 31 3.2 0.18 (1.7%)

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