BK Dividend

BANK of NEW YORK MELLON dividend

Although BK has a dividend of 0.28 with an ex-dividend date of Oct 29, you can sell covered calls on BANK of NEW YORK MELLON to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 12:30 PM ET):

BANK of NEW YORK MELLON (BK)
Bid Ask Last Change Volume P/E Market Cap
47.99 48.02 48.02 -1.13 3.7M 12 49B

BK Dividend-Like Income Using Covered Calls

With BK at 48.02, 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% 1.44 0.4
5% 2.40 0.7
10% 4.80 1.3

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 BK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 26 50.50 0.05 9 0.6 2.48 (5.2%)
Nov 2 50.00 0.13 16 0.8 1.98 (4.1%)
5% Yield On BK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 26 50.00 0.09 9 1.0 1.98 (4.1%)
Nov 2 50.00 0.13 16 0.8 1.98 (4.1%)
10% Yield On BK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 26 49.50 0.17 9 1.9 1.48 (3.1%)
Nov 2 49.50 0.22 16 1.4 1.48 (3.1%)

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