UNP Dividend Type Payments

Union Pacific Corp dividend

Although UNP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Union Pacific Corp to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):

Union Pacific Corp (UNP)
Bid Ask Last Change Volume P/E Market Cap
159.12 169.69 162.61 +1.61 3.1M 20 115B

UNP Dividend-Like Income Using Covered Calls

With UNP at 162.61, 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% 4.88 1.3
5% 8.13 2.2
10% 16.26 4.5

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 UNP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 172.50 0.48 29 1.7 2.81 (1.7%)
Apr 26 172.50 0.68 37 1.8 2.81 (1.7%)
5% Yield On UNP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 170.00 1.08 29 3.7 0.31 (0.2%)
Apr 26 170.00 1.29 37 3.5 0.31 (0.2%)

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