AJG Dividend

Although AJG has a dividend of 0.65 with an ex-dividend date of Dec 5, you can sell covered calls on Arthur J. Gallagher & Co. to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):

Arthur J. Gallagher & Co. (AJG)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
250.00	261.59	258.51	+1.80	1.8M	41	66B

AJG Dividend-Like Income Using Covered Calls

With AJG at 258.51, 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%	7.76	2.1
5%	12.93	3.5
10%	25.85	7.1

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 AJG Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Dec 19	270.00	4.40	36	12.2	8.41 (3.3%)
Nov 21	270.00	0.50	8	6.3	8.41 (3.3%)

5% Yield On AJG Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Dec 19	270.00	4.40	36	12.2	8.41 (3.3%)
Nov 21	270.00	0.50	8	6.3	8.41 (3.3%)

10% Yield On AJG Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Dec 19	270.00	4.40	36	12.2	8.41 (3.3%)
Jan 16	270.00	6.60	64	10.3	8.41 (3.3%)

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