WST Dividend Type Payments

Although WST has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on West Pharmaceutical Services, 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):

West Pharmaceutical Services, Inc. (WST)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
270.01	289.80	273.03	-1.11	459K	41	20B

WST Dividend-Like Income Using Covered Calls

With WST at 273.03, 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%	8.19	2.2
5%	13.65	3.7
10%	27.30	7.5

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 WST Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Jan 16	290.00	2.35	46	5.1	0.20 (0.1%)
Sep 18	290.00	30.20	291	10.4	0.20 (0.1%)

5% Yield On WST Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Jan 16	290.00	2.35	46	5.1	0.20 (0.1%)
Sep 18	290.00	30.20	291	10.4	0.20 (0.1%)

10% Yield On WST Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Sep 18	290.00	30.20	291	10.4	0.20 (0.1%)
Dec 18	290.00	36.00	382	9.4	0.20 (0.1%)

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