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 Tue 4:16 PM ET):

Watts Water Technologies, Inc. Class A (WTS)
Bid Ask Last Change Volume P/E Market Cap
192.21 217.60 206.84 +0.58 148K 24 6.9B

WTS Dividend-Like Income Using Covered Calls

With WTS at 206.84, 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% 6.21 1.7
5% 10.34 2.8
10% 20.68 5.7

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
Sep 19 220.00 5.10 144 3.5 2.40 (1.2%)
Dec 19 220.00 9.10 235 3.9 2.40 (1.2%)
5% Yield On WTS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 19 220.00 5.10 144 3.5 2.40 (1.2%)
Dec 19 220.00 9.10 235 3.9 2.40 (1.2%)

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