SNA Dividend

Snap-On Incorporated dividend

Although SNA has a dividend of 2.14 with an ex-dividend date of May 20, you can sell covered calls on Snap-On Incorporated to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 12:30 PM ET):

Snap-On Incorporated (SNA)
Bid Ask Last Change Volume P/E Market Cap
308.52 309.10 308.80 +0.04 79K 16 16B

SNA Dividend-Like Income Using Covered Calls

With SNA at 308.80, 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% 9.26 2.5
5% 15.44 4.2
10% 30.88 8.5

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 SNA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 16 310.00 7.40 19 38.9 0.90 (0.3%)
Sep 19 310.00 19.60 145 13.5 0.90 (0.3%)
5% Yield On SNA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 16 310.00 7.40 19 38.9 0.90 (0.3%)
Sep 19 310.00 19.60 145 13.5 0.90 (0.3%)
10% Yield On SNA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 16 310.00 7.40 19 38.9 0.90 (0.3%)
Sep 19 310.00 19.60 145 13.5 0.90 (0.3%)

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Want more examples? SN Dividend | SNAP Dividend