JNJ Dividend

Although JNJ has a dividend of 1.30 with an ex-dividend date of May 27, you can sell covered calls on Johnson & Johnson 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):

Johnson & Johnson (JNJ)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
155.81	156.20	155.91	+0.56	5.1M	17	374B

JNJ Dividend-Like Income Using Covered Calls

With JNJ at 155.91, 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%	4.68	1.3
5%	7.80	2.1
10%	15.59	4.3

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 JNJ Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 2	157.50	0.44	4	11.0	1.30 (0.8%)
Jun 6	165.00	0.52	39	1.3	8.80 (5.6%)

5% Yield On JNJ Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 2	157.50	0.44	4	11.0	1.30 (0.8%)
May 9	157.50	1.12	11	10.2	1.30 (0.8%)

10% Yield On JNJ Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 2	157.50	0.44	4	11.0	1.30 (0.8%)
May 9	157.50	1.12	11	10.2	1.30 (0.8%)

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Want more examples? JMOM Dividend | JNK Dividend