XRX Dividend

XEROX dividend

Although XRX has a dividend of 0.25 with an ex-dividend date of Dec 28, you can sell covered calls on XEROX to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 12:40 PM ET):

XEROX (XRX)
Bid Ask Last Change Volume P/E Market Cap
26.35 26.36 26.35 -0.05 3.3M 61 6.7B

XRX Dividend-Like Income Using Covered Calls

With XRX at 26.35, 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% 0.79 0.2
5% 1.32 0.4
10% 2.64 0.7

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 XRX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 30.00 0.09 25 0.4 3.64 (13.8%)
Dec 21 29.00 0.23 60 0.4 2.64 (10.0%)
5% Yield On XRX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 29.00 0.16 25 0.6 2.64 (10.0%)
Dec 21 29.00 0.23 60 0.4 2.64 (10.0%)
10% Yield On XRX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 28.00 0.30 25 1.2 1.64 (6.2%)
Dec 21 28.00 0.64 60 1.1 1.64 (6.2%)

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