SWBI Dividend Type Payments
Although SWBI has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Smith & Wesson Brands, Inc. 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):
| Smith & Wesson Brands, Inc. (SWBI) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 9.45 |
9.51 |
10.88 |
+0.39 |
1.4M |
16 |
0.5B |
SWBI Dividend-Like Income Using Covered Calls
With SWBI at 10.88, 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% |
0.33 |
0.1 |
| 5% |
0.54 |
0.1 |
| 10% |
1.09 |
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 SWBI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
10.00 |
0.80 |
59 |
1.4 |
0.49 (4.5%) |
| Jul 18 |
10.00 |
1.25 |
31 |
4.0 |
0.49 (4.5%) |
| 5% Yield On SWBI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
10.00 |
0.80 |
59 |
1.4 |
0.49 (4.5%) |
| Jul 18 |
10.00 |
1.25 |
31 |
4.0 |
0.49 (4.5%) |
| 10% Yield On SWBI Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
10.00 |
0.80 |
59 |
1.4 |
0.49 (4.5%) |
| Jul 18 |
10.00 |
1.25 |
31 |
4.0 |
0.49 (4.5%) |
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