CAT Dividend Type Payments

CATERPILLAR dividend

Although CAT has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on CATERPILLAR to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 3:00 PM ET):

CATERPILLAR (CAT)
Bid Ask Last Change Volume P/E Market Cap
126.18 126.22 126.20 -0.71 3.8M 20 78B

CAT Dividend-Like Income Using Covered Calls

With CAT at 126.20, here's a table showing how big the annual "dividend" (ie. 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% 3.79 1.0
5% 6.31 1.7
10% 12.62 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 CAT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 141.00 0.07 5 1.4 14.78 (11.7%)
Nov 23 141.00 0.14 12 1.2 14.78 (11.7%)
5% Yield On CAT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 139.00 0.10 5 2.0 12.78 (10.1%)
Nov 23 139.00 0.22 12 1.8 12.78 (10.1%)
10% Yield On CAT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 136.00 0.21 5 4.2 9.78 (7.7%)
Nov 23 136.00 0.45 12 3.8 9.78 (7.7%)

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Top 10 Open Interest For Nov 16 Expiration     Top 5 High Yield
1.SPY dividend 6.PBR dividend   1.VKTX dividend
2.EEM dividend 7.IWM dividend   2.UVXY dividend
3.EWZ dividend 8.FXI dividend   3.AMRN dividend
4.QQQ dividend 9.BAC dividend   4.TLRY dividend
5.SPX dividend 10.VXX dividend   5.CRON dividend

Want more examples? CASY Dividend | CATM Dividend