EQR Dividend

Equity Residential Common Shares of Beneficial Interest dividend

Although EQR has a dividend of 0.69 with an ex-dividend date of Jan 2, you can sell covered calls on Equity Residential Common Shares of Beneficial Interest to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 4:16 PM ET):

Equity Residential Common Shares of Beneficial Interest (EQR)
Bid Ask Last Change Volume P/E Market Cap
61.55 63.10 62.73 +0.40 694K 21 24B

EQR Dividend-Like Income Using Covered Calls

With EQR at 62.73, here's a table showing how big the annual "dividend" (i.e. 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% 1.88 0.5
5% 3.14 0.9
10% 6.27 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 EQR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 17 65.00 1.20 115 1.0 1.90 (3.0%)
Jul 17 65.00 2.00 206 1.0 1.90 (3.0%)
5% Yield On EQR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 17 65.00 1.20 115 1.0 1.90 (3.0%)
Jul 17 65.00 2.00 206 1.0 1.90 (3.0%)

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