TREX Dividend Type Payments

Although TREX has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Trex Co, Inc to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 11:45 AM ET):

Trex Co, Inc (TREX)
Bid Ask Last Change Volume P/E Market Cap
75.25 75.29 75.27 -0.37 179K 33 4.4B

TREX Dividend-Like Income Using Covered Calls

With TREX at 75.27, 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% 2.26 0.6
5% 3.76 1.0
10% 7.53 2.1

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 TREX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 80.00 0.55 22 2.5 4.71 (6.3%)
Apr 18 85.00 0.60 56 1.1 9.71 (12.9%)
5% Yield On TREX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 80.00 0.55 22 2.5 4.71 (6.3%)
Apr 18 85.00 0.60 56 1.1 9.71 (12.9%)
10% Yield On TREX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 80.00 0.55 22 2.5 4.71 (6.3%)
Apr 18 80.00 1.70 56 3.0 4.71 (6.3%)

Want to increase dividends with covered calls?  Sign Up For A Free Trial

 
Top 10 Open Interest For Mar 15 Expiration     Top 5 High Yield
1.SPX dividend 6.EWZ dividend   1.AMRN dividend
2.EEM dividend 7.GE dividend   2.APHA dividend
3.SPY dividend 8.LLY dividend   3.CRON dividend
4.QQQ dividend 9.BAC dividend   4.FIT dividend
5.FXI dividend 10.GLD dividend   5.KPTI dividend

Want more examples? TREE Dividend | TRGP Dividend