CFR Dividend Type Payments

Cullen/Frost Bankers, Inc. dividend

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

Cullen/Frost Bankers, Inc. (CFR)
Bid Ask Last Change Volume P/E Market Cap
116.26 131.11 125.32 +2.49 267K 13 7.9B

CFR Dividend-Like Income Using Covered Calls

With CFR at 125.32, 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% 3.76 1.0
5% 6.27 1.7
10% 12.53 3.4

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 CFR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 16 135.00 2.50 96 2.6 3.89 (3.1%)
Apr 17 135.00 4.50 187 2.4 3.89 (3.1%)
5% Yield On CFR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 16 135.00 2.50 96 2.6 3.89 (3.1%)
Apr 17 135.00 4.50 187 2.4 3.89 (3.1%)

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