HD Dividend
Although HD has a dividend of 1.03 with an ex-dividend date of Nov 28, you can sell covered calls on HOME DEPOT to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 2:50 PM ET):
| HOME DEPOT (HD) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 174.02 | 174.06 | 174.04 | -2.98 | 3.9M | 21 | 203B |
HD Dividend-Like Income Using Covered Calls
With HD at 174.04, 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% | 5.22 | 1.4 |
| 5% | 8.70 | 2.4 |
| 10% | 17.40 | 4.8 |
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 HD Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Nov 23 | 180.00 | 0.23 | 5 | 4.6 | 5.94 (3.4%) | |
| Nov 30 | 185.00 | 0.21 | 12 | 1.8 | 10.94 (6.3%) | |
| 5% Yield On HD Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Nov 23 | 180.00 | 0.23 | 5 | 4.6 | 5.94 (3.4%) | |
| Nov 30 | 182.50 | 0.41 | 12 | 3.4 | 8.44 (4.8%) | |
| 10% Yield On HD Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Nov 23 | 177.50 | 0.62 | 5 | 12.4 | 3.44 (2.0%) | |
| Nov 30 | 180.00 | 0.79 | 12 | 6.6 | 5.94 (3.4%) | |
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| Top 10 Open Interest For Dec 21 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | SPY dividend | 6. | FXI dividend | 1. | VOD dividend | |
| 2. | SPX dividend | 7. | IWM dividend | 2. | CTL dividend | |
| 3. | EEM dividend | 8. | PBR dividend | 3. | UVXY dividend | |
| 4. | QQQ dividend | 9. | F dividend | 4. | AMD dividend | |
| 5. | EWZ dividend | 10. | BAC dividend | 5. | NBR dividend | |
Want more examples? HCSG Dividend | HDAW Dividend
