BHP Dividend Type Payments

BHP Group Limited American Depositary Shares (Each representing two Ordi dividend

Although BHP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on BHP Group Limited American Depositary Shares (Each representing two Ordi to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 4:16 PM ET):

BHP Group Limited American Depositary Shares (Each representing two Ordi (BHP)
Bid Ask Last Change Volume P/E Market Cap
52.12 52.98 52.32 -0.28 3.1M - 155B

BHP Dividend-Like Income Using Covered Calls

With BHP at 52.32, 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% 1.57 0.4
5% 2.62 0.7
10% 5.23 1.4

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 BHP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 20 55.00 0.80 38 2.1 2.02 (3.9%)
May 16 55.00 1.40 185 0.8 2.02 (3.9%)
5% Yield On BHP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 20 55.00 0.80 38 2.1 2.02 (3.9%)
May 16 55.00 1.40 185 0.8 2.02 (3.9%)
10% Yield On BHP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 20 55.00 0.80 38 2.1 2.02 (3.9%)
Jan 17 55.00 1.05 66 1.6 2.02 (3.9%)

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