HD Dividend

HOME DEPOT 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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