LW Dividend

Although LW has a dividend of 0.20 with an ex-dividend date of Aug 1, you can sell covered calls on Lamb Weston Holdings, Inc to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 11:55 AM ET):

Lamb Weston Holdings, Inc (LW)
Bid Ask Last Change Volume P/E Market Cap
68.50 68.51 68.50 +0.54 576K 22 10B

LW Dividend-Like Income Using Covered Calls

With LW at 68.50, 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% 2.06 0.6
5% 3.43 0.9
10% 6.85 1.9

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 LW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 16 75.00 0.20 29 0.7 6.49 (9.5%)
Oct 18 75.00 1.20 92 1.3 6.49 (9.5%)
5% Yield On LW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 16 70.00 1.30 29 4.5 1.49 (2.2%)
Oct 18 75.00 1.20 92 1.3 6.49 (9.5%)
10% Yield On LW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 16 70.00 1.30 29 4.5 1.49 (2.2%)
Oct 18 70.00 2.85 92 3.1 1.49 (2.2%)

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Top 10 Open Interest For Aug 16 Expiration     Top 5 High Yield
1.SPY dividend 6.QQQ dividend   1.HOME dividend
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3.EEM dividend 8.BAC dividend   3.ITCI dividend
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5.GDX dividend 10.EWZ dividend   5.TWTR dividend

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