WMG Dividend Type Payments

Warner Music Group Corp. - Class A dividend

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

Warner Music Group Corp. - Class A (WMG)
Bid Ask Last Change Volume P/E Market Cap
31.07 34.72 32.69 -0.12 2.3M 58 17B

WMG Dividend-Like Income Using Covered Calls

With WMG at 32.69, here's a table showing how big the annual "dividend" (i.e. 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% 0.98 0.3
5% 1.63 0.4
10% 3.27 0.9

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 WMG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 21 35.00 0.65 78 0.8 0.28 (0.9%)
Jan 16 35.00 1.05 134 0.8 0.28 (0.9%)
5% Yield On WMG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 21 35.00 0.65 78 0.8 0.28 (0.9%)
Jan 16 35.00 1.05 134 0.8 0.28 (0.9%)

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