SAH Dividend

Although SAH has a dividend of 0.06 with an ex-dividend date of Sep 13, you can sell covered calls on SONIC AUTOMOTIVE 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):

SONIC AUTOMOTIVE (SAH)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
21.60	22.25	21.80	+0.55	114K	10	0.9B

SAH Dividend-Like Income Using Covered Calls

With SAH at 21.80, 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%	0.65	0.2
5%	1.09	0.3
10%	2.18	0.6

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 SAH Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Sep 21	22.50	0.45	36	1.3	0.25 (1.1%)
Nov 16	25.00	0.40	92	0.4	2.75 (12.6%)

5% Yield On SAH Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Sep 21	22.50	0.45	36	1.3	0.25 (1.1%)
Nov 16	25.00	0.40	92	0.4	2.75 (12.6%)

10% Yield On SAH Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Sep 21	22.50	0.45	36	1.3	0.25 (1.1%)
Nov 16	22.50	1.10	92	1.2	0.25 (1.1%)

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Top 10 Open Interest For Sep 21 Expiration				Top 5 High Yield
1.	EEM dividend	6.	GE dividend	1.	COTY dividend
2.	SPY dividend	7.	GLD dividend	2.	LB dividend
3.	SPX dividend	8.	FB dividend	3.	AKRX dividend
4.	QQQ dividend	9.	IWM dividend	4.	UVXY dividend
5.	XLF dividend	10.	GDX dividend	5.	GPS dividend

Want more examples? SAGG Dividend | SAIA Dividend