PK Dividend
Although PK has a dividend of 0.25 with an ex-dividend date of Jun 30, you can sell covered calls on Park Hotels & Resorts Inc. to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 4:16 PM ET):
| Park Hotels & Resorts Inc. (PK) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 9.87 |
9.94 |
9.92 |
-0.23 |
5.6M |
10 |
2.0B |
PK Dividend-Like Income Using Covered Calls
With PK at 9.92, here's a table showing how big the annual "dividend" (i.e. 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% |
0.30 |
0.1 |
| 5% |
0.50 |
0.1 |
| 10% |
0.99 |
0.3 |
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 PK Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
10.00 |
0.20 |
11 |
1.8 |
0.06 (0.6%) |
| Jul 18 |
10.00 |
0.55 |
74 |
0.7 |
0.06 (0.6%) |
| 5% Yield On PK Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
10.00 |
0.20 |
11 |
1.8 |
0.06 (0.6%) |
| Jul 18 |
10.00 |
0.55 |
74 |
0.7 |
0.06 (0.6%) |
| 10% Yield On PK Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
10.00 |
0.20 |
11 |
1.8 |
0.06 (0.6%) |
| Jul 18 |
10.00 |
0.55 |
74 |
0.7 |
0.06 (0.6%) |
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