LOW Dividend

LOWES COMPANIES dividend

Although LOW has a dividend of 0.48 with an ex-dividend date of Oct 23, you can sell covered calls on LOWES COMPANIES to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 3:30 PM ET):

LOWES COMPANIES (LOW)
Bid Ask Last Change Volume P/E Market Cap
99.94 99.95 99.95 -2.49 4.7M 22 83B

LOW Dividend-Like Income Using Covered Calls

With LOW at 99.95, 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% 3.00 0.8
5% 5.00 1.4
10% 10.00 2.7

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 LOW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 26 107.00 0.09 9 1.0 7.05 (7.1%)
Nov 2 108.00 0.18 16 1.1 8.05 (8.1%)
5% Yield On LOW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 26 106.00 0.14 9 1.6 6.05 (6.1%)
Nov 2 107.00 0.25 16 1.6 7.05 (7.1%)
10% Yield On LOW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 26 104.00 0.32 9 3.6 4.05 (4.1%)
Nov 2 105.00 0.44 16 2.8 5.05 (5.1%)

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