BHGE Dividend Type Payments

Although BHGE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on BAKER HUGHES A GE CO to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 10:10 AM ET):

BAKER HUGHES A GE CO (BHGE)
Bid Ask Last Change Volume P/E Market Cap
30.79 30.80 30.79 -0.05 155K - 34B

BHGE Dividend-Like Income Using Covered Calls

With BHGE at 30.79, 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% 0.92 0.3
5% 1.54 0.4
10% 3.08 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 BHGE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 32.00 0.05 3 1.7 1.20 (3.9%)
Nov 16 35.00 0.15 31 0.5 4.20 (13.6%)
5% Yield On BHGE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 32.00 0.05 3 1.7 1.20 (3.9%)
Nov 16 35.00 0.15 31 0.5 4.20 (13.6%)
10% Yield On BHGE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 32.00 0.05 3 1.7 1.20 (3.9%)
Nov 16 33.00 0.40 31 1.3 2.20 (7.1%)

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