RMD Dividend Type Payments

RESMED dividend

Although RMD has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on RESMED 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):

RESMED (RMD)
Bid Ask Last Change Volume P/E Market Cap
95.63 107.30 106.80 -0.04 731K 48 15B

RMD Dividend-Like Income Using Covered Calls

With RMD at 106.80, 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% 3.20 0.9
5% 5.34 1.5
10% 10.68 2.9

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 RMD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 110.00 1.05 36 2.9 2.70 (2.5%)
Oct 19 115.00 0.60 64 0.9 7.70 (7.2%)
5% Yield On RMD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 110.00 1.05 36 2.9 2.70 (2.5%)
Oct 19 110.00 1.90 64 3.0 2.70 (2.5%)
10% Yield On RMD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 110.00 1.90 64 3.0 2.70 (2.5%)
Jan 18 110.00 4.70 155 3.0 2.70 (2.5%)

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