WST Dividend

West Pharmaceuticals, Inc dividend

Although WST has a dividend of 0.15 with an ex-dividend date of Apr 16, you can sell covered calls on West Pharmaceuticals, Inc 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):

West Pharmaceuticals, Inc (WST)
Bid Ask Last Change Volume P/E Market Cap
105.50 110.00 105.50 +0.54 277K 38 7.8B

WST Dividend-Like Income Using Covered Calls

With WST at 105.50, 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% 3.17 0.9
5% 5.28 1.4
10% 10.55 2.9

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 WST Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 110.00 0.35 24 1.5 0.00 (0.0%)
May 17 115.00 0.75 53 1.4 5.00 (4.7%)
5% Yield On WST Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 110.00 0.35 24 1.5 0.00 (0.0%)
May 17 110.00 1.95 53 3.7 0.00 (0.0%)
10% Yield On WST Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 17 110.00 1.95 53 3.7 0.00 (0.0%)
Jun 21 110.00 2.65 88 3.0 0.00 (0.0%)

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