SNN Dividend Type Payments

Smith & Nephew SNATS, Inc. dividend

Although SNN has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Smith & Nephew SNATS, Inc. 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):

Smith & Nephew SNATS, Inc. (SNN)
Bid Ask Last Change Volume P/E Market Cap
32.92 33.67 33.28 -0.13 167K - 22B

SNN Dividend-Like Income Using Covered Calls

With SNN at 33.28, 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% 1.00 0.3
5% 1.66 0.5
10% 3.33 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 SNN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 19 35.00 0.15 22 0.7 1.33 (4.0%)
5% Yield On SNN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 19 35.00 0.15 22 0.7 1.33 (4.0%)

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