ZTS Dividend

Zoetis Inc. Class A dividend

Although ZTS has a dividend of 0.50 with an ex-dividend date of Oct 31, 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 11:55 AM ET):

Zoetis Inc. Class A (ZTS)
Bid Ask Last Change Volume P/E Market Cap
143.20 143.33 143.24 -0.22 1.1M 25 64B

ZTS Dividend-Like Income Using Covered Calls

With ZTS at 143.24, 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% 4.30 1.2
5% 7.16 2.0
10% 14.32 3.9

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
Oct 17 145.00 0.75 3 25.0 1.67 (1.2%)
Dec 19 145.00 6.40 66 9.7 1.67 (1.2%)
5% Yield On ZTS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 145.00 0.75 3 25.0 1.67 (1.2%)
Dec 19 145.00 6.40 66 9.7 1.67 (1.2%)
10% Yield On ZTS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 17 145.00 0.75 3 25.0 1.67 (1.2%)
Dec 19 145.00 6.40 66 9.7 1.67 (1.2%)

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