HD Dividend Type Payments

HOME DEPOT dividend

Although HD has no upcoming (meaning, Board-approved and announced) dividends, 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 4:16 PM ET):

HOME DEPOT (HD)
Bid Ask Last Change Volume P/E Market Cap
196.96 199.85 198.88 +0.19 2.4M 26 229B

HD Dividend-Like Income Using Covered Calls

With HD at 198.88, 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% 5.97 1.6
5% 9.94 2.7
10% 19.89 5.4

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 HD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 20 202.50 0.16 5 3.2 2.65 (1.3%)
Jul 27 205.00 0.24 12 2.0 5.15 (2.6%)
5% Yield On HD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 20 202.50 0.16 5 3.2 2.65 (1.3%)
Jul 27 202.50 0.64 12 5.3 2.65 (1.3%)
10% Yield On HD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 20 200.00 0.74 5 14.8 0.15 (0.1%)
Jul 27 200.00 1.47 12 12.3 0.15 (0.1%)

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