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 Wed 4:16 PM ET):

Watts Water Technologies, Inc. Class A (WTS)
Bid Ask Last Change Volume P/E Market Cap
227.15 259.57 241.05 +0.53 215K 28 8.0B

WTS Dividend-Like Income Using Covered Calls

With WTS at 241.05, 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% 7.23 2.0
5% 12.05 3.3
10% 24.11 6.6

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
Aug 15 260.00 1.65 59 2.8 0.43 (0.2%)
Sep 19 260.00 3.10 94 3.3 0.43 (0.2%)
5% Yield On WTS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 19 260.00 8.00 185 4.3 0.43 (0.2%)

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