DDS Dividend

Dillards, Inc dividend

Although DDS has a dividend of 0.10 with an ex-dividend date of Dec 28, you can sell covered calls on Dillards, Inc to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 9:55 AM ET):

Dillards, Inc (DDS)
Bid Ask Last Change Volume P/E Market Cap
61.85 62.17 61.93 +0.37 12K - 0.0B

DDS Dividend-Like Income Using Covered Calls

With DDS at 61.93, 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% 1.86 0.5
5% 3.10 0.8
10% 6.19 1.7

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 DDS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 65.50 0.05 3 1.7 3.33 (5.4%)
Dec 28 67.50 0.15 10 1.5 5.33 (8.6%)
5% Yield On DDS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 65.50 0.05 3 1.7 3.33 (5.4%)
Dec 28 67.50 0.15 10 1.5 5.33 (8.6%)
10% Yield On DDS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 65.00 0.15 3 5.0 2.83 (4.6%)
Dec 28 66.50 0.25 10 2.5 4.33 (7.0%)

Want to increase dividends with covered calls?  Sign Up For A Free Trial

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

Want more examples? DDP Dividend | DE Dividend