CVS Dividend Type Payments

CVS Health Corp dividend

Although CVS has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on CVS Health Corp 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):

CVS Health Corp (CVS)
Bid Ask Last Change Volume P/E Market Cap
74.25 76.58 74.50 +1.09 9.4M - 0.0B

CVS Dividend-Like Income Using Covered Calls

With CVS at 74.50, 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% 2.24 0.6
5% 3.73 1.0
10% 7.45 2.0

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 CVS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 14 77.50 0.04 3 1.3 0.92 (1.2%)
Dec 21 80.00 0.09 10 0.9 3.42 (4.6%)
5% Yield On CVS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 14 77.50 0.04 3 1.3 0.92 (1.2%)
Dec 21 79.50 0.11 10 1.1 2.92 (3.9%)
10% Yield On CVS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 14 77.00 0.07 3 2.3 0.42 (0.6%)
Dec 21 78.50 0.23 10 2.3 1.92 (2.6%)

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Top 10 Open Interest For Dec 21 Expiration     Top 5 High Yield
1.SPY dividend 6.IWM dividend   1. dividend
2.EEM dividend 7.FXI dividend   2. dividend
3.SPX dividend 8.GE dividend   3. dividend
4.QQQ dividend 9.VXX dividend   4. dividend
5.EWZ dividend 10.BAC dividend   5. dividend

Want more examples? CVRR Dividend | CVTI Dividend