PXD Dividend Type Payments

PIONEER NATURAL RESOURCES dividend

Although PXD has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on PIONEER NATURAL RESOURCES 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):

PIONEER NATURAL RESOURCES (PXD)
Bid Ask Last Change Volume P/E Market Cap
160.00 179.00 173.20 +0.11 1.6M 34 30B

PXD Dividend-Like Income Using Covered Calls

With PXD at 173.20, 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% 5.20 1.4
5% 8.66 2.4
10% 17.32 4.7

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 PXD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 185.00 0.15 8 1.9 6.00 (3.5%)
Aug 31 187.50 0.30 15 2.0 8.50 (4.9%)
5% Yield On PXD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 182.50 0.25 8 3.1 3.50 (2.0%)
Aug 31 185.00 0.45 15 3.0 6.00 (3.5%)
10% Yield On PXD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 180.00 0.50 8 6.3 1.00 (0.6%)
Aug 31 182.50 0.75 15 5.0 3.50 (2.0%)

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