ZTS Dividend Type Payments

Zoetis Inc. Class A dividend

Although ZTS has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Zoetis 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):

Zoetis Inc. Class A (ZTS)
Bid Ask Last Change Volume P/E Market Cap
153.00 157.00 155.43 +1.86 2.1M 28 69B

ZTS Dividend-Like Income Using Covered Calls

With ZTS at 155.43, 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% 4.66 1.3
5% 7.77 2.1
10% 15.54 4.3

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 ZTS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 16 160.00 3.30 18 18.3 3.00 (1.9%)
Oct 17 160.00 10.80 172 6.3 3.00 (1.9%)
5% Yield On ZTS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 16 160.00 3.30 18 18.3 3.00 (1.9%)
Oct 17 160.00 10.80 172 6.3 3.00 (1.9%)
10% Yield On ZTS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 16 160.00 3.30 18 18.3 3.00 (1.9%)
Oct 17 160.00 10.80 172 6.3 3.00 (1.9%)

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