PKG Dividend Type Payments

PACKAGING CORP of AMERICA dividend

Although PKG has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on PACKAGING CORP of AMERICA to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 2:35 PM ET):

PACKAGING CORP of AMERICA (PKG)
Bid Ask Last Change Volume P/E Market Cap
88.16 88.20 88.18 +0.13 1.3M 11 8.3B

PKG Dividend-Like Income Using Covered Calls

With PKG at 88.18, 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% 2.65 0.7
5% 4.41 1.2
10% 8.82 2.4

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 PKG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 95.00 0.05 5 1.0 6.80 (7.7%)
Nov 16 100.00 0.35 33 1.1 11.80 (13.4%)
5% Yield On PKG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 90.00 0.60 5 12.0 1.80 (2.0%)
Nov 16 95.00 1.25 33 3.8 6.80 (7.7%)
10% Yield On PKG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 90.00 0.60 5 12.0 1.80 (2.0%)
Nov 16 95.00 1.25 33 3.8 6.80 (7.7%)

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