CARR Dividend
Although CARR has a dividend of 0.24 with an ex-dividend date of Jan 20, you can sell covered calls on Carrier Global Corporation 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):
| Carrier Global Corporation (CARR) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 55.00 |
56.02 |
55.21 |
-0.17 |
5.1M |
12 |
47B |
CARR Dividend-Like Income Using Covered Calls
With CARR at 55.21, 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% |
1.66 |
0.5 |
| 5% |
2.76 |
0.8 |
| 10% |
5.52 |
1.5 |
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 CARR Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 16 |
57.50 |
0.05 |
4 |
1.3 |
1.48 (2.7%) |
| Jun 18 |
57.50 |
3.90 |
157 |
2.5 |
1.48 (2.7%) |
| 5% Yield On CARR Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 16 |
57.50 |
0.05 |
4 |
1.3 |
1.48 (2.7%) |
| Jun 18 |
57.50 |
3.90 |
157 |
2.5 |
1.48 (2.7%) |
| 10% Yield On CARR Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jun 18 |
57.50 |
3.90 |
157 |
2.5 |
1.48 (2.7%) |
| Sep 18 |
57.50 |
5.10 |
249 |
2.0 |
1.48 (2.7%) |
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