EMN Dividend

Eastman Chemical dividend

Although EMN has a dividend of 0.62 with an ex-dividend date of Mar 14, you can sell covered calls on Eastman Chemical to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):

Eastman Chemical (EMN)
Bid Ask Last Change Volume P/E Market Cap
80.23 83.18 82.71 +0.95 1.0M 7.7 11B

EMN Dividend-Like Income Using Covered Calls

With EMN at 82.71, 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% 2.48 0.7
5% 4.14 1.1
10% 8.27 2.3

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 EMN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 87.50 0.25 29 0.9 4.32 (5.2%)
Jun 21 92.50 0.90 127 0.7 9.32 (11.3%)
5% Yield On EMN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 85.00 0.85 29 2.9 1.82 (2.2%)
Jun 21 87.50 2.15 127 1.7 4.32 (5.2%)
10% Yield On EMN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 85.00 0.85 29 2.9 1.82 (2.2%)
Jun 21 85.00 3.10 127 2.4 1.82 (2.2%)

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