NKE Dividend

NIKE dividend

Although NKE has a dividend of 0.20 with an ex-dividend date of Aug 31, you can sell covered calls on NIKE to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 4:16 PM ET):

NIKE (NKE)
Bid Ask Last Change Volume P/E Market Cap
77.99 80.03 79.57 -0.57 4.9M 67 128B

NKE Dividend-Like Income Using Covered Calls

With NKE at 79.57, 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% 2.39 0.7
5% 3.98 1.1
10% 7.96 2.2

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 NKE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 17 81.50 0.03 3 1.0 1.47 (1.8%)
Aug 24 83.00 0.07 10 0.7 2.97 (3.7%)
5% Yield On NKE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 17 81.00 0.07 3 2.3 0.97 (1.2%)
Aug 24 82.50 0.12 10 1.2 2.47 (3.1%)
10% Yield On NKE Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 17 81.00 0.07 3 2.3 0.97 (1.2%)
Aug 24 81.50 0.26 10 2.6 1.47 (1.8%)

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