STT Dividend

STATE STREET dividend

Although STT has a dividend of 0.47 with an ex-dividend date of Sep 28, you can sell covered calls on STATE STREET 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):

STATE STREET (STT)
Bid Ask Last Change Volume P/E Market Cap
78.94 86.76 84.96 +0.75 2.0M 14 32B

STT Dividend-Like Income Using Covered Calls

With STT at 84.96, 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% 2.55 0.7
5% 4.25 1.2
10% 8.50 2.3

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 STT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 90.00 0.37 36 1.0 3.24 (3.8%)
Nov 16 95.00 0.65 92 0.7 8.24 (9.7%)
5% Yield On STT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 87.50 0.94 36 2.6 0.74 (0.9%)
Nov 16 92.50 1.08 92 1.2 5.74 (6.8%)
10% Yield On STT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 87.50 0.94 36 2.6 0.74 (0.9%)
Nov 16 87.50 2.59 92 2.8 0.74 (0.9%)

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