VLO Dividend Type Payments

Valero Energy Corp dividend

Although VLO has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Valero Energy Corp to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 10:15 AM ET):

Valero Energy Corp (VLO)
Bid Ask Last Change Volume P/E Market Cap
72.71 72.77 72.74 +1.68 450K - 0.0B

VLO Dividend-Like Income Using Covered Calls

With VLO at 72.74, 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% 2.18 0.6
5% 3.64 1.0
10% 7.27 2.0

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 VLO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 78.50 0.04 3 1.3 5.73 (7.9%)
Dec 28 80.00 0.09 10 0.9 7.23 (9.9%)
5% Yield On VLO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 78.50 0.04 3 1.3 5.73 (7.9%)
Dec 28 79.00 0.14 10 1.4 6.23 (8.6%)
10% Yield On VLO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 77.00 0.08 3 2.7 4.23 (5.8%)
Dec 28 78.00 0.23 10 2.3 5.23 (7.2%)

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Top 10 Open Interest For Dec 21 Expiration     Top 5 High Yield
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5.IWM dividend 10.HYG dividend   5. dividend

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