TXT Dividend Type Payments

Textron Inc. dividend

Although TXT has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Textron Inc. 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):

Textron Inc. (TXT)
Bid Ask Last Change Volume P/E Market Cap
86.33 88.66 87.45 -1.13 929K 19 17B

TXT Dividend-Like Income Using Covered Calls

With TXT at 87.45, 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% 2.62 0.7
5% 4.37 1.2
10% 8.75 2.4

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 TXT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 15 90.00 2.35 46 5.1 1.34 (1.5%)
Oct 18 90.00 0.75 18 4.2 1.34 (1.5%)
5% Yield On TXT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 15 90.00 2.35 46 5.1 1.34 (1.5%)
Oct 18 90.00 0.75 18 4.2 1.34 (1.5%)
10% Yield On TXT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 15 90.00 2.35 46 5.1 1.34 (1.5%)
Oct 18 90.00 0.75 18 4.2 1.34 (1.5%)

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