DBP Dividend Type Payments
Although DBP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on INVESCO DB PRECIOUS METALS to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 9:45 AM ET):
| INVESCO DB PRECIOUS METALS (DBP) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 34.22 | 34.25 | 34.22 | +0.22 | 1K | - | 2.6B |
DBP Dividend-Like Income Using Covered Calls
With DBP at 34.22, 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% | 1.03 | 0.3 |
| 5% | 1.71 | 0.5 |
| 10% | 3.42 | 0.9 |
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 DBP Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Jan 18 | 35.00 | 0.55 | 156 | 0.4 | 0.75 (2.2%) | |
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| Top 10 Open Interest For Aug 17 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | SPY dividend | 6. | XLF dividend | 1. | NVDA dividend | |
| 2. | EEM dividend | 7. | FB dividend | 2. | AMAT dividend | |
| 3. | QQQ dividend | 8. | FXI dividend | 3. | JWN dividend | |
| 4. | BAC dividend | 9. | GLD dividend | 4. | GDS dividend | |
| 5. | SPX dividend | 10. | AABA dividend | 5. | TUR dividend | |
Want more examples? DBOLIX Dividend | DBPMIX Dividend
