STI Dividend Type Payments

SunTrust Banks, Inc dividend

Although STI has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SunTrust Banks, 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):

SunTrust Banks, Inc (STI)
Bid Ask Last Change Volume P/E Market Cap
57.34 59.65 57.40 -2.77 6.8M 11 27B

STI Dividend-Like Income Using Covered Calls

With STI at 57.40, 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% 1.72 0.5
5% 2.87 0.8
10% 5.74 1.6

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 STI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 62.50 0.14 28 0.5 2.85 (5.0%)
May 17 62.50 0.44 57 0.8 2.85 (5.0%)
5% Yield On STI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 60.00 0.51 28 1.8 0.35 (0.6%)
May 17 60.00 1.02 57 1.8 0.35 (0.6%)
10% Yield On STI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 60.00 0.51 28 1.8 0.35 (0.6%)
May 17 60.00 1.02 57 1.8 0.35 (0.6%)

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Want more examples? STFC Dividend | STIP Dividend