JNJ Dividend

Although JNJ has a dividend of 1.30 with an ex-dividend date of Aug 26, you can sell covered calls on Johnson & Johnson to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):

Johnson & Johnson (JNJ)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
170.25	171.15	171.53	+0.94	9.2M	18	411B

JNJ Dividend-Like Income Using Covered Calls

With JNJ at 171.53, 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%	5.15	1.4
5%	8.58	2.3
10%	17.15	4.7

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 JNJ Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Sep 5	175.00	0.87	30	2.9	3.85 (2.2%)
Sep 12	175.00	1.15	37	3.1	3.85 (2.2%)

5% Yield On JNJ Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Sep 5	175.00	0.87	30	2.9	3.85 (2.2%)
Sep 12	175.00	1.15	37	3.1	3.85 (2.2%)

10% Yield On JNJ Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Aug 15	172.50	0.97	9	10.8	1.35 (0.8%)
Aug 22	172.50	1.37	16	8.6	1.35 (0.8%)

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Want more examples? JMOM Dividend | JNK Dividend