Lowe's Offers An Interesting Opportunity To Double Your Dividend Aristocrat Yield

The dividend yield column is what you are accustomed to seeing on any financial website. The premium yield column shows the upfront cash flow that you could receive based on the strike prices in the first table. The final column - max gain - shows the gain that you are agreeing to cap your returns at, should the option be exercised. Note that this includes the strike price and premium, but does not include dividend payments, which could add to your return.

To make the information clear, let's run through an example. The annualized gains aren't as clear-cut with companies that have asterisks, so we'll stick to an option expiring in January of 2017. One alternative that immediately jumps out to me is Lowe's. The current share price is around $72, with a $1.12 annual dividend based on a $0.28 quarterly payout. You could own shares of this company, collect the dividend and do just fine over the coming years.

Source: Seeking Alpha

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