CP Dividend Type Payments

CANADIAN PACIFIC RAILWAY dividend

Although CP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on CANADIAN PACIFIC RAILWAY to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 1:10 PM ET):

CANADIAN PACIFIC RAILWAY (CP)
Bid Ask Last Change Volume P/E Market Cap
204.07 204.30 204.11 +2.63 153K 17 29B

CP Dividend-Like Income Using Covered Calls

With CP at 204.11, 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% 6.12 1.7
5% 10.21 2.8
10% 20.41 5.6

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 CP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 210.00 1.55 32 4.8 5.70 (2.8%)
Oct 19 220.00 1.05 60 1.8 15.70 (7.7%)
5% Yield On CP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 210.00 1.55 32 4.8 5.70 (2.8%)
Oct 19 210.00 3.60 60 6.0 5.70 (2.8%)
10% Yield On CP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 210.00 3.60 60 6.0 5.70 (2.8%)

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Top 10 Open Interest For Sep 21 Expiration     Top 5 High Yield
1.SPY dividend 6.GE dividend   1.MOMO dividend
2.EEM dividend 7.GLD dividend   2.LB dividend
3.SPX dividend 8.FB dividend   3.GPS dividend
4.QQQ dividend 9.IWM dividend   4.GERN dividend
5.XLF dividend 10.GDX dividend   5.AKRX dividend

Want more examples? COWN Dividend | CPA Dividend