PGR Dividend

Progressive Corp dividend

Although PGR has a dividend of 0.10 with an ex-dividend date of Jul 3, you can sell covered calls on Progressive Corp 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):

Progressive Corp (PGR)
Bid Ask Last Change Volume P/E Market Cap
79.50 81.96 80.12 -1.75 4.5M 16 48B

PGR Dividend-Like Income Using Covered Calls

With PGR at 80.12, 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% 2.40 0.7
5% 4.01 1.1
10% 8.01 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 PGR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 19 85.00 0.40 29 1.4 3.04 (3.8%)
Aug 16 87.50 0.45 57 0.8 5.54 (6.9%)
5% Yield On PGR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 19 85.00 0.40 29 1.4 3.04 (3.8%)
Aug 16 85.00 0.90 57 1.6 3.04 (3.8%)
10% Yield On PGR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 19 82.50 0.90 29 3.1 0.54 (0.7%)
Aug 16 82.50 1.70 57 3.0 0.54 (0.7%)

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