CDW Dividend Type Payments

CDW CORP COMMON dividend

Although CDW has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on CDW CORP COMMON 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):

CDW CORP COMMON (CDW)
Bid Ask Last Change Volume P/E Market Cap
81.60 83.91 83.91 -0.55 585K 21 13B

CDW Dividend-Like Income Using Covered Calls

With CDW at 83.91, 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% 2.52 0.7
5% 4.20 1.1
10% 8.39 2.3

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 CDW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 85.00 0.05 3 1.7 1.09 (1.3%)
Nov 16 90.00 0.40 31 1.3 6.09 (7.3%)
5% Yield On CDW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 85.00 0.05 3 1.7 1.09 (1.3%)
Nov 16 90.00 0.40 31 1.3 6.09 (7.3%)
10% Yield On CDW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 85.00 1.95 31 6.3 1.09 (1.3%)
Dec 21 85.00 2.75 66 4.2 1.09 (1.3%)

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Top 10 Open Interest For Oct 19 Expiration     Top 5 High Yield
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