UPS Dividend

UNITED PARCEL SERVICE dividend

Although UPS has a dividend of 0.91 with an ex-dividend date of Aug 17, you can sell covered calls on UNITED PARCEL SERVICE 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):

UNITED PARCEL SERVICE (UPS)
Bid Ask Last Change Volume P/E Market Cap
119.00 121.40 121.11 +1.06 2.1M 20 103B

UPS Dividend-Like Income Using Covered Calls

With UPS at 121.11, 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% 3.63 1.0
5% 6.06 1.7
10% 12.11 3.3

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 UPS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 124.00 0.10 9 1.1 2.60 (2.1%)
Aug 31 125.00 0.17 16 1.1 3.60 (3.0%)
5% Yield On UPS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 123.00 0.21 9 2.3 1.60 (1.3%)
Aug 31 124.00 0.29 16 1.8 2.60 (2.1%)
10% Yield On UPS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 122.00 0.41 9 4.6 0.60 (0.5%)
Aug 31 122.00 0.77 16 4.8 0.60 (0.5%)

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