LLY Dividend Type Payments

Eli Lilly & Co dividend

Although LLY has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Eli Lilly & Co 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):

Eli Lilly & Co (LLY)
Bid Ask Last Change Volume P/E Market Cap
120.16 122.30 122.48 +1.73 10.5M 257 128B

LLY Dividend-Like Income Using Covered Calls

With LLY at 122.48, 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% 3.67 1.0
5% 6.12 1.7
10% 12.25 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 LLY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 22 125.00 0.10 8 1.3 2.70 (2.2%)
Mar 1 126.00 0.20 15 1.3 3.70 (3.0%)
5% Yield On LLY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 22 123.00 0.61 8 7.6 0.70 (0.6%)
Mar 1 125.00 0.60 15 4.0 2.70 (2.2%)
10% Yield On LLY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 22 123.00 0.61 8 7.6 0.70 (0.6%)
Mar 1 125.00 0.60 15 4.0 2.70 (2.2%)

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