PENN Dividend Type Payments

PENN NATIONAL GAMING dividend

Although PENN has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on PENN NATIONAL GAMING 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):

PENN NATIONAL GAMING (PENN)
Bid Ask Last Change Volume P/E Market Cap
28.15 29.14 28.15 -1.66 2.1M 4.9 3.5B

PENN Dividend-Like Income Using Covered Calls

With PENN at 28.15, 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% 0.84 0.2
5% 1.41 0.4
10% 2.82 0.8

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 PENN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 35.00 0.10 29 0.3 5.86 (20.8%)
Jan 18 36.00 0.30 92 0.3 6.86 (24.4%)
5% Yield On PENN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 34.00 0.15 29 0.5 4.86 (17.3%)
Jan 18 35.00 0.40 92 0.4 5.86 (20.8%)
10% Yield On PENN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 32.00 0.30 29 1.0 2.86 (10.2%)
Jan 18 32.00 0.95 92 1.0 2.86 (10.2%)

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