MDP Dividend

MEREDITH dividend

Although MDP has a dividend of 0.55 with an ex-dividend date of Aug 30, you can sell covered calls on MEREDITH to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):

MEREDITH (MDP)
Bid Ask Last Change Volume P/E Market Cap
50.85 52.00 51.10 +1.40 489K 34 2.2B

MDP Dividend-Like Income Using Covered Calls

With MDP at 51.10, 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% 1.53 0.4
5% 2.56 0.7
10% 5.11 1.4

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 MDP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 55.00 0.30 37 0.8 3.00 (5.9%)
Dec 21 60.00 0.55 128 0.4 8.00 (15.7%)
5% Yield On MDP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 55.00 0.30 37 0.8 3.00 (5.9%)
Dec 21 55.00 1.45 128 1.1 3.00 (5.9%)

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Want more examples? MDO Dividend | MDR Dividend