HUM Dividend

Humana, Inc dividend

Although HUM has a dividend of 0.55 with an ex-dividend date of Mar 28, you can sell covered calls on Humana, Inc to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 10:45 AM ET):

Humana, Inc (HUM)
Bid Ask Last Change Volume P/E Market Cap
309.03 309.30 309.29 +1.73 94K 28 42B

HUM Dividend-Like Income Using Covered Calls

With HUM at 309.29, 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% 9.28 2.5
5% 15.46 4.2
10% 30.93 8.5

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 HUM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 1 320.00 0.30 8 3.8 10.70 (3.5%)
Mar 8 325.00 0.45 15 3.0 15.70 (5.1%)
5% Yield On HUM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 1 317.50 0.55 8 6.9 8.20 (2.7%)
Mar 8 322.50 0.65 15 4.3 13.20 (4.3%)
10% Yield On HUM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 1 315.00 1.10 8 13.8 5.70 (1.8%)
Mar 8 315.00 1.60 15 10.7 5.70 (1.8%)

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