JNJ Dividend

Although JNJ has a dividend of 1.30 with an ex-dividend date of Aug 26, 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 Fri 4:16 PM ET):

Johnson & Johnson (JNJ)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
166.88	167.68	167.33	+2.59	8.8M	18	397B

JNJ Dividend-Like Income Using Covered Calls

With JNJ at 167.33, 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%	5.02	1.4
5%	8.37	2.3
10%	16.73	4.6

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
Sep 5	170.00	1.30	36	3.6	2.32 (1.4%)
Aug 8	167.50	1.50	8	16.5	0.00 (0.0%)

5% Yield On JNJ Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Sep 5	170.00	1.30	36	3.6	2.32 (1.4%)
Aug 8	167.50	1.50	8	16.5	0.00 (0.0%)

10% Yield On JNJ Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Aug 8	167.50	1.50	8	16.5	0.00 (0.0%)
Aug 15	167.50	2.14	15	13.1	0.00 (0.0%)

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