FSS Dividend

Although FSS has a dividend of 0.14 with an ex-dividend date of May 16, you can sell covered calls on Federal Signal Corporation to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 4:16 PM ET):

Federal Signal Corporation (FSS)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
81.26	90.00	87.32	-0.03	333K	26	5.3B

FSS Dividend-Like Income Using Covered Calls

With FSS at 87.32, 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%	2.62	0.7
5%	4.37	1.2
10%	8.73	2.4

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 FSS Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Aug 15	90.00	3.60	102	3.5	0.00 (0.0%)
Jun 20	90.00	2.45	46	5.3	0.00 (0.0%)

5% Yield On FSS Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Aug 15	90.00	3.60	102	3.5	0.00 (0.0%)
Jun 20	90.00	2.45	46	5.3	0.00 (0.0%)

10% Yield On FSS Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Aug 15	90.00	3.60	102	3.5	0.00 (0.0%)
Jun 20	90.00	2.45	46	5.3	0.00 (0.0%)

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Want more examples? FSP Dividend | FSTA Dividend