JNJ Dividend

JOHNSON & JOHNSON dividend

Although JNJ has a dividend of 0.90 with an ex-dividend date of May 25, 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 Mon 4:16 PM ET):

JOHNSON & JOHNSON (JNJ)
Bid Ask Last Change Volume P/E Market Cap
123.52 123.72 123.72 -0.52 5.4M 259 333B

JNJ Dividend-Like Income Using Covered Calls

With JNJ at 123.72, 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% 3.71 1.0
5% 6.19 1.7
10% 12.37 3.4

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 JNJ Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 25 126.00 0.12 5 2.4 2.28 (1.8%)
Jun 1 127.00 0.14 12 1.2 3.28 (2.7%)
5% Yield On JNJ Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 25 126.00 0.12 5 2.4 2.28 (1.8%)
Jun 1 126.00 0.26 12 2.2 2.28 (1.8%)
10% Yield On JNJ Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 25 125.00 0.29 5 5.8 1.28 (1.0%)
Jun 1 125.00 0.48 12 4.0 1.28 (1.0%)

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