RIO Dividend Type Payments

RIO Tinto dividend

Although RIO has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on RIO Tinto to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 4:16 PM ET):

RIO Tinto (RIO)
Bid Ask Last Change Volume P/E Market Cap
57.80 58.68 57.79 +0.84 6.4M 7.2 97B

RIO Dividend-Like Income Using Covered Calls

With RIO at 57.79, 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% 1.73 0.5
5% 2.89 0.8
10% 5.78 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 RIO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 60.00 0.45 24 1.9 1.32 (2.3%)
May 17 62.50 0.45 53 0.8 3.82 (6.6%)
5% Yield On RIO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 60.00 0.45 24 1.9 1.32 (2.3%)
May 17 62.50 0.45 53 0.8 3.82 (6.6%)
10% Yield On RIO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 60.00 0.45 24 1.9 1.32 (2.3%)
May 17 60.00 1.10 53 2.1 1.32 (2.3%)

Want to increase dividends with covered calls?  Sign Up For A Free Trial

 
Top 10 Open Interest For Apr 18 Expiration     Top 5 High Yield
1.SPY dividend 6.USO dividend   1.LULU dividend
2.EEM dividend 7.AAPL dividend   2.NBEV dividend
3.SPX dividend 8.BMY dividend   3.BB dividend
4.QQQ dividend 9.EWZ dividend   4.SPWR dividend
5.FXI dividend 10.IWM dividend   5.ROKU dividend

Want more examples? RING Dividend | RIOT Dividend