TOL Dividend

Toll Brothers, Inc. dividend

Although TOL has a dividend of 0.25 with an ex-dividend date of Oct 10, you can sell covered calls on Toll Brothers, Inc. to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):

Toll Brothers, Inc. (TOL)
Bid Ask Last Change Volume P/E Market Cap
137.00 139.00 138.28 +1.06 831K 10 13B

TOL Dividend-Like Income Using Covered Calls

With TOL at 138.28, 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% 4.15 1.1
5% 6.91 1.9
10% 13.83 3.8

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 TOL Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 140.00 3.20 19 16.8 1.00 (0.7%)
Dec 19 140.00 8.90 82 10.9 1.00 (0.7%)
5% Yield On TOL Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 140.00 3.20 19 16.8 1.00 (0.7%)
Dec 19 140.00 8.90 82 10.9 1.00 (0.7%)
10% Yield On TOL Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 140.00 3.20 19 16.8 1.00 (0.7%)
Dec 19 140.00 8.90 82 10.9 1.00 (0.7%)

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