RMD Dividend
Although RMD has a dividend of 0.53 with an ex-dividend date of May 8, you can sell covered calls on ResMed Inc. 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):
| ResMed Inc. (RMD) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 238.95 | 251.95 | 241.95 | +1.29 | 883K | 27 | 35B |
RMD Dividend-Like Income Using Covered Calls
With RMD at 241.95, 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% | 7.26 | 2.0 |
| 5% | 12.10 | 3.3 |
| 10% | 24.20 | 6.6 |
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 RMD Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Aug 15 | 260.00 | 7.60 | 102 | 7.5 | 8.05 (3.3%) | |
| Oct 17 | 260.00 | 11.80 | 165 | 7.2 | 8.05 (3.3%) | |
| 5% Yield On RMD Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Aug 15 | 260.00 | 7.60 | 102 | 7.5 | 8.05 (3.3%) | |
| Oct 17 | 260.00 | 11.80 | 165 | 7.2 | 8.05 (3.3%) | |
| 10% Yield On RMD Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Aug 15 | 260.00 | 7.60 | 102 | 7.5 | 8.05 (3.3%) | |
| Oct 17 | 260.00 | 11.80 | 165 | 7.2 | 8.05 (3.3%) | |
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| Top 10 Open Interest For May 16 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | NVDA dividend | 6. | IWM dividend | 1. | UPST dividend | |
| 2. | SPY dividend | 7. | FXI dividend | 2. | APP dividend | |
| 3. | TLT dividend | 8. | TSLA dividend | 3. | IONQ dividend | |
| 4. | SLV dividend | 9. | GLD dividend | 4. | RUN dividend | |
| 5. | QQQ dividend | 10. | INTC dividend | 5. | PINS dividend | |
Want more examples? RMBS Dividend | RMNI Dividend
