LULU Dividend Type Payments

LULULEMON ATHLETICA dividend

Although LULU has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on LULULEMON ATHLETICA 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):

LULULEMON ATHLETICA (LULU)
Bid Ask Last Change Volume P/E Market Cap
130.15 132.20 130.19 +0.72 982K 58 17B

LULU Dividend-Like Income Using Covered Calls

With LULU at 130.19, 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% 3.91 1.1
5% 6.51 1.8
10% 13.02 3.6

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 LULU Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 138.00 0.09 8 1.1 5.80 (4.5%)
Aug 31 155.00 0.48 15 3.2 22.80 (17.5%)
5% Yield On LULU Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 137.00 0.15 8 1.9 4.80 (3.7%)
Aug 31 155.00 0.48 15 3.2 22.80 (17.5%)
10% Yield On LULU Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 135.00 0.38 8 4.8 2.80 (2.2%)
Aug 31 150.00 0.91 15 6.1 17.80 (13.7%)

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