SCM Dividend
Although SCM has a dividend of 0.13 with an ex-dividend date of Nov 28, you can sell covered calls on Stellus Capital Investment Corporation 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):
| Stellus Capital Investment Corporation (SCM) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 11.61 | 11.95 | 11.85 | +0.23 | 205K | 11 | 0.3B |
SCM Dividend-Like Income Using Covered Calls
With SCM at 11.85, 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% | 0.36 | 0.1 |
| 5% | 0.59 | 0.2 |
| 10% | 1.19 | 0.3 |
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 SCM Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Mar 20 | 12.50 | 0.15 | 120 | 0.1 | 0.55 (4.6%) | |
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| Top 10 Open Interest For Dec 19 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | NVDA dividend | 6. | EEM dividend | 1. | RZLT dividend | |
| 2. | IWM dividend | 7. | SLV dividend | 2. | IMNM dividend | |
| 3. | SPY dividend | 8. | TLT dividend | 3. | VTYX dividend | |
| 4. | IBIT dividend | 9. | GLD dividend | 4. | JANX dividend | |
| 5. | QQQ dividend | 10. | NFLX dividend | 5. | CIFR dividend | |
Want more examples? SCL Dividend | SCO Dividend
