BMO Dividend

Bank Of Montreal dividend

Although BMO has a dividend of 1.20 with an ex-dividend date of Jan 30, you can sell covered calls on Bank Of Montreal to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):

Bank Of Montreal (BMO)
Bid Ask Last Change Volume P/E Market Cap
126.75 129.48 128.85 +2.16 696K 15 81B

BMO Dividend-Like Income Using Covered Calls

With BMO at 128.85, 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% 3.87 1.1
5% 6.44 1.8
10% 12.89 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 BMO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 19 130.00 1.20 15 8.0 0.52 (0.4%)
Jan 16 130.00 1.85 43 4.3 0.52 (0.4%)
5% Yield On BMO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 19 130.00 1.20 15 8.0 0.52 (0.4%)
Jan 16 130.00 1.85 43 4.3 0.52 (0.4%)
10% Yield On BMO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 19 130.00 1.20 15 8.0 0.52 (0.4%)
Jan 16 130.00 1.85 43 4.3 0.52 (0.4%)

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