KAI Dividend

Kadant Inc dividend

Although KAI has a dividend of 0.34 with an ex-dividend date of Oct 9, you can sell covered calls on Kadant Inc to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 1:45 PM ET):

Kadant Inc (KAI)
Bid Ask Last Change Volume P/E Market Cap
324.78 325.99 325.80 -1.15 28K 36 3.8B

KAI Dividend-Like Income Using Covered Calls

With KAI at 325.80, 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% 9.77 2.7
5% 16.29 4.5
10% 32.58 8.9

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 KAI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 330.00 8.70 40 21.8 4.01 (1.2%)
Sep 19 330.00 0.90 12 7.5 4.01 (1.2%)
5% Yield On KAI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 330.00 8.70 40 21.8 4.01 (1.2%)
Sep 19 330.00 0.90 12 7.5 4.01 (1.2%)
10% Yield On KAI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 330.00 8.70 40 21.8 4.01 (1.2%)
Nov 21 330.00 13.70 75 18.3 4.01 (1.2%)

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