RRR Dividend

RED ROCK RESORTS dividend

Although RRR has a dividend of 0.10 with an ex-dividend date of Sep 13, you can sell covered calls on RED ROCK RESORTS to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):

RED ROCK RESORTS (RRR)
Bid Ask Last Change Volume P/E Market Cap
31.95 32.75 32.09 -0.22 355K 13 3.8B

RRR Dividend-Like Income Using Covered Calls

With RRR at 32.09, 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% 0.96 0.3
5% 1.60 0.4
10% 3.21 0.9

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 RRR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 35.00 0.20 33 0.6 2.25 (7.0%)
Oct 19 35.00 0.60 61 1.0 2.25 (7.0%)
5% Yield On RRR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 35.00 0.20 33 0.6 2.25 (7.0%)
Oct 19 35.00 0.60 61 1.0 2.25 (7.0%)
10% Yield On RRR Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 35.00 0.60 61 1.0 2.25 (7.0%)
Jan 18 35.00 1.40 152 0.9 2.25 (7.0%)

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