VSEC Dividend
Although VSEC has a dividend of 0.10 with an ex-dividend date of Jan 15, you can sell covered calls on VSE Corporation to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 11:55 AM ET):
| VSE Corporation (VSEC) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 204.64 |
207.27 |
205.89 |
-1.73 |
102K |
328 |
4.3B |
VSEC Dividend-Like Income Using Covered Calls
With VSEC at 205.89, 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% |
6.18 |
1.7 |
| 5% |
10.29 |
2.8 |
| 10% |
20.59 |
5.6 |
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 VSEC Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
210.00 |
16.00 |
94 |
17.0 |
2.73 (1.3%) |
| Jul 17 |
210.00 |
24.50 |
185 |
13.2 |
2.73 (1.3%) |
| 5% Yield On VSEC Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
210.00 |
16.00 |
94 |
17.0 |
2.73 (1.3%) |
| Jul 17 |
210.00 |
24.50 |
185 |
13.2 |
2.73 (1.3%) |
| 10% Yield On VSEC Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
210.00 |
16.00 |
94 |
17.0 |
2.73 (1.3%) |
| Jul 17 |
210.00 |
24.50 |
185 |
13.2 |
2.73 (1.3%) |
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