HMC Dividend Type Payments

Honda Motor Company, Ltd. dividend

Although HMC has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Honda Motor Company, Ltd. 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):

Honda Motor Company, Ltd. (HMC)
Bid Ask Last Change Volume P/E Market Cap
34.43 34.86 34.58 +0.03 724K 26 67B

HMC Dividend-Like Income Using Covered Calls

With HMC at 34.58, 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% 1.04 0.3
5% 1.73 0.5
10% 3.46 0.9

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 HMC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 17 35.00 0.70 25 2.8 0.14 (0.4%)
Jun 21 35.00 1.15 60 1.9 0.14 (0.4%)
5% Yield On HMC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 17 35.00 0.70 25 2.8 0.14 (0.4%)
Jun 21 35.00 1.15 60 1.9 0.14 (0.4%)
10% Yield On HMC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 17 35.00 0.70 25 2.8 0.14 (0.4%)
Jun 21 35.00 1.15 60 1.9 0.14 (0.4%)

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