DXC Dividend

Although DXC has a dividend of 0.19 with an ex-dividend date of Mar 26, you can sell covered calls on DXC Tech Co to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):

DXC Tech Co (DXC)
Bid Ask Last Change Volume P/E Market Cap
63.00 68.00 64.42 +0.08 950K 12 17B

DXC Dividend-Like Income Using Covered Calls

With DXC at 64.42, 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% 1.93 0.5
5% 3.22 0.9
10% 6.44 1.8

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 DXC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 17 70.00 0.45 54 0.8 2.00 (3.1%)
Jun 21 72.50 0.70 89 0.8 4.50 (7.0%)
5% Yield On DXC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 21 70.00 1.35 89 1.5 2.00 (3.1%)
Sep 20 72.50 1.80 180 1.0 4.50 (7.0%)

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Want more examples? DX Dividend | DXCM Dividend