ARCO Dividend

Although ARCO has a dividend of 0.06 with an ex-dividend date of Dec 22, you can sell covered calls on Arcos Dorados Holdings Inc. Class A Shares to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 10:30 AM ET):

Arcos Dorados Holdings Inc. Class A Shares (ARCO)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
7.11	7.12	7.11	+0.02	71K	10	1.5B

ARCO Dividend-Like Income Using Covered Calls

With ARCO at 7.11, 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%	0.21	0.1
5%	0.36	0.1
10%	0.71	0.2

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 ARCO Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Nov 21	7.50	0.10	30	0.3	0.38 (5.3%)
May 15	7.50	0.50	205	0.2	0.38 (5.3%)

5% Yield On ARCO Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Nov 21	7.50	0.10	30	0.3	0.38 (5.3%)
May 15	7.50	0.50	205	0.2	0.38 (5.3%)

10% Yield On ARCO Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Nov 21	7.50	0.10	30	0.3	0.38 (5.3%)
May 15	7.50	0.50	205	0.2	0.38 (5.3%)

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Want more examples? ARCC Dividend | ARCT Dividend