ZTS Dividend

Zoetis Inc. Class A dividend

Although ZTS has a dividend of 0.53 with an ex-dividend date of Apr 20, you can sell covered calls on Zoetis Inc. Class A 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):

Zoetis Inc. Class A (ZTS)
Bid Ask Last Change Volume P/E Market Cap
127.00 129.18 128.67 +0.54 6.8M 22 57B

ZTS Dividend-Like Income Using Covered Calls

With ZTS at 128.67, 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% 3.86 1.1
5% 6.43 1.8
10% 12.87 3.5

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 ZTS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 20 130.00 4.20 10 42.0 0.82 (0.6%)
Mar 20 130.00 5.90 38 15.5 0.82 (0.6%)
5% Yield On ZTS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 20 130.00 4.20 10 42.0 0.82 (0.6%)
Mar 20 130.00 5.90 38 15.5 0.82 (0.6%)
10% Yield On ZTS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 20 130.00 4.20 10 42.0 0.82 (0.6%)
Mar 20 130.00 5.90 38 15.5 0.82 (0.6%)

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