PSEC Dividend
Although PSEC has a dividend of 0.05 with an ex-dividend date of Dec 29, you can sell covered calls on Prospect Capital Corporation - Closed End Fund 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):
| Prospect Capital Corporation - Closed End Fund (PSEC) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 2.62 | 2.63 | 2.62 | -0.02 | 3.1M | - | 1.2B |
PSEC Dividend-Like Income Using Covered Calls
With PSEC at 2.62, 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% | 0.08 | 0.0 |
| 5% | 0.13 | 0.0 |
| 10% | 0.26 | 0.1 |
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 PSEC Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| May 15 | 3.00 | 0.05 | 155 | 0.0 | 0.37 (14.1%) | |
| Jan 15 | 3.00 | 0.10 | 400 | 0.0 | 0.37 (14.1%) | |
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| Top 10 Open Interest For Dec 19 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | NVDA dividend | 6. | EEM dividend | 1. | NKTR dividend | |
| 2. | SPY dividend | 7. | TLT dividend | 2. | AVXL dividend | |
| 3. | IBIT dividend | 8. | SLV dividend | 3. | CTMX dividend | |
| 4. | IWM dividend | 9. | NFLX dividend | 4. | BE dividend | |
| 5. | QQQ dividend | 10. | TSLA dividend | 5. | OMER dividend | |
Want more examples? PSCH Dividend | PSEP Dividend
