UTY Dividend Type Payments

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

PHLX UTIL (UTY)
Bid Ask Last Change Volume P/E Market Cap
692.97 692.97 692.97 -3.79 0K - 0.0B

UTY Dividend-Like Income Using Covered Calls

With UTY at 692.97, 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% 20.79 5.7
5% 34.65 9.5
10% 69.30 19.0

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 UTY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 715.00 2.00 32 6.3 22.03 (3.2%)
Jan 18 725.00 3.50 60 5.8 32.03 (4.6%)
5% Yield On UTY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 710.00 3.50 32 10.9 17.03 (2.5%)
Jan 18 715.00 6.50 60 10.8 22.03 (3.2%)
10% Yield On UTY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 700.00 7.00 32 21.9 7.03 (1.0%)
Jan 18 700.00 13.00 60 21.7 7.03 (1.0%)

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