PNW Dividend Type Payments

PINNACLE WEST CAPITAL dividend

Although PNW has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on PINNACLE WEST CAPITAL 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):

PINNACLE WEST CAPITAL (PNW)
Bid Ask Last Change Volume P/E Market Cap
79.57 82.71 82.27 +0.57 1.5M 20 9.1B

PNW Dividend-Like Income Using Covered Calls

With PNW at 82.27, 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% 2.47 0.7
5% 4.11 1.1
10% 8.23 2.3

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 PNW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 85.00 0.35 36 1.0 2.29 (2.8%)
Oct 19 85.00 0.85 64 1.3 2.29 (2.8%)
5% Yield On PNW Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 85.00 0.85 64 1.3 2.29 (2.8%)
Jan 18 85.00 1.85 155 1.2 2.29 (2.8%)

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