YUM Dividend Type Payments

Yum! Brands, Inc dividend

Although YUM has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Yum! Brands, Inc to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):

Yum! Brands, Inc (YUM)
Bid Ask Last Change Volume P/E Market Cap
95.61 100.40 100.24 -0.66 1.5M 22 31B

YUM Dividend-Like Income Using Covered Calls

With YUM at 100.24, 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% 3.01 0.8
5% 5.01 1.4
10% 10.02 2.7

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 YUM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 22 102.00 0.06 5 1.2 1.60 (1.6%)
Mar 29 103.00 0.11 12 0.9 2.60 (2.6%)
5% Yield On YUM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 22 101.00 0.29 5 5.8 0.60 (0.6%)
Mar 29 102.00 0.27 12 2.3 1.60 (1.6%)
10% Yield On YUM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 22 101.00 0.29 5 5.8 0.60 (0.6%)
Mar 29 101.00 0.59 12 4.9 0.60 (0.6%)

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