WTS Dividend Type Payments

Watts Water Technologies, Inc. Class A dividend

Although WTS has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Watts Water Technologies, Inc. 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):

Watts Water Technologies, Inc. Class A (WTS)
Bid Ask Last Change Volume P/E Market Cap
262.55 297.97 279.11 +1.19 201K 29 9.3B

WTS Dividend-Like Income Using Covered Calls

With WTS at 279.11, 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% 8.37 2.3
5% 13.96 3.8
10% 27.91 7.6

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 WTS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 15 300.00 6.60 155 4.3 2.03 (0.7%)
Mar 20 300.00 2.55 99 2.6 2.03 (0.7%)
5% Yield On WTS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 15 300.00 6.60 155 4.3 2.03 (0.7%)

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