PKW Dividend Type Payments

Although PKW has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on POWERSHARES BUYBACK ACHIEVERS PORTFOLIO to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 2:10 PM ET):

POWERSHARES BUYBACK ACHIEVERS PORTFOLIO (PKW)
Bid Ask Last Change Volume P/E Market Cap
58.28 58.30 58.26 +0.08 33K 28 13B

PKW Dividend-Like Income Using Covered Calls

With PKW at 58.26, 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% 1.75 0.5
5% 2.91 0.8
10% 5.83 1.6

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 PKW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 59.00 0.20 29 0.7 0.70 (1.2%)
Feb 15 59.00 1.10 120 0.9 0.70 (1.2%)
5% Yield On PKW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 15 59.00 1.10 120 0.9 0.70 (1.2%)
May 17 59.00 1.70 211 0.8 0.70 (1.2%)

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Want more examples? PKOH Dividend | PKX Dividend