SKT Dividend Type Payments

Tanger Factory Outlet Centers, Inc dividend

Although SKT has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Tanger Factory Outlet Centers, Inc to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 10:55 AM ET):

Tanger Factory Outlet Centers, Inc (SKT)
Bid Ask Last Change Volume P/E Market Cap
20.07 20.08 20.08 +0.13 223K 44 1.9B

SKT Dividend-Like Income Using Covered Calls

With SKT at 20.08, 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% 0.60 0.2
5% 1.00 0.3
10% 2.01 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 SKT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 21.00 0.10 31 0.3 0.92 (4.6%)
May 17 22.00 0.10 60 0.2 1.92 (9.6%)
5% Yield On SKT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 21.00 0.10 31 0.3 0.92 (4.6%)
May 17 21.00 0.30 60 0.5 0.92 (4.6%)
10% Yield On SKT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 20.00 0.50 31 1.4 0.00 (0.0%)
May 17 20.00 0.70 60 1.0 0.00 (0.0%)

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