SMG Dividend

Although SMG has a dividend of 0.66 with an ex-dividend date of Aug 22, you can sell covered calls on Scotts Miracle-Gro Company (The) 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):

Scotts Miracle-Gro Company (The) (SMG)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
60.90	62.17	61.87	-0.79	1.2M	116	3.6B

SMG Dividend-Like Income Using Covered Calls

With SMG at 61.87, 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%	1.86	0.5
5%	3.09	0.8
10%	6.19	1.7

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 SMG Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Aug 15	62.50	1.35	15	9.0	0.33 (0.5%)
Sep 19	62.50	2.60	50	5.2	0.33 (0.5%)

5% Yield On SMG Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Aug 15	62.50	1.35	15	9.0	0.33 (0.5%)
Sep 19	62.50	2.60	50	5.2	0.33 (0.5%)

10% Yield On SMG Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Aug 15	62.50	1.35	15	9.0	0.33 (0.5%)
Sep 19	62.50	2.60	50	5.2	0.33 (0.5%)

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