RDY Dividend Type Payments
Although RDY has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on DR Reddy Labs to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 1:35 PM ET):
| DR Reddy Labs (RDY) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 36.02 | 36.05 | 36.03 | +0.26 | 209K | - | 5.9B |
RDY Dividend-Like Income Using Covered Calls
With RDY at 36.03, 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% | 1.08 | 0.3 |
| 5% | 1.80 | 0.5 |
| 10% | 3.60 | 1.0 |
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 RDY Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Mar 15 | 40.00 | 0.10 | 23 | 0.4 | 3.95 (11.0%) | |
| Apr 18 | 40.00 | 0.35 | 57 | 0.6 | 3.95 (11.0%) | |
| 5% Yield On RDY Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Apr 18 | 40.00 | 0.35 | 57 | 0.6 | 3.95 (11.0%) | |
| Jun 21 | 40.00 | 1.00 | 121 | 0.8 | 3.95 (11.0%) | |
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| Top 10 Open Interest For Mar 15 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | SPX dividend | 6. | EWZ dividend | 1. | ROKU dividend | |
| 2. | EEM dividend | 7. | GE dividend | 2. | OLED dividend | |
| 3. | SPY dividend | 8. | LLY dividend | 3. | FSLR dividend | |
| 4. | QQQ dividend | 9. | BAC dividend | 4. | IQ dividend | |
| 5. | FXI dividend | 10. | GLD dividend | 5. | TTD dividend | |
Want more examples? RDWR Dividend | RE Dividend
