DISCA Dividend Type Payments

DISCOVERY COMMUNICATIONS dividend

Although DISCA has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on DISCOVERY COMMUNICATIONS to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 11:15 AM ET):

DISCOVERY COMMUNICATIONS (DISCA)
Bid Ask Last Change Volume P/E Market Cap
26.48 26.49 26.48 +0.42 744K - 13B

DISCA Dividend-Like Income Using Covered Calls

With DISCA at 26.48, 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% 0.79 0.2
5% 1.32 0.4
10% 2.65 0.7

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 DISCA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 30.00 0.10 37 0.3 3.51 (13.3%)
Oct 19 30.00 0.25 65 0.4 3.51 (13.3%)
5% Yield On DISCA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 27.50 0.55 37 1.5 1.01 (3.8%)
Oct 19 30.00 0.25 65 0.4 3.51 (13.3%)
10% Yield On DISCA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 27.50 0.55 37 1.5 1.01 (3.8%)
Oct 19 27.50 0.85 65 1.3 1.01 (3.8%)

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Want more examples? DIS Dividend | DISCK Dividend