CAT Dividend Type Payments

Caterpillar, Inc dividend

Although CAT has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Caterpillar, Inc to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 1:45 PM ET):

Caterpillar, Inc (CAT)
Bid Ask Last Change Volume P/E Market Cap
133.93 133.96 133.94 +0.93 1.2M 13 77B

CAT Dividend-Like Income Using Covered Calls

With CAT at 133.94, 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% 4.02 1.1
5% 6.70 1.8
10% 13.39 3.7

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
Mar 29 141.00 0.10 9 1.1 7.04 (5.3%)
Apr 5 142.00 0.24 16 1.5 8.04 (6.0%)
5% Yield On CAT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 29 140.00 0.17 9 1.9 6.04 (4.5%)
Apr 5 141.00 0.31 16 1.9 7.04 (5.3%)
10% Yield On CAT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 29 138.00 0.44 9 4.9 4.04 (3.0%)
Apr 5 139.00 0.66 16 4.1 5.04 (3.8%)

Want to increase dividends with covered calls?  Sign Up For A Free Trial

 
 
Top 10 Open Interest For Apr 18 Expiration     Top 5 High Yield
1.SPY dividend 6.FXI dividend   1.NKE dividend
2.EEM dividend 7.BMY dividend   2.MO dividend
3.SPX dividend 8.AAPL dividend   3.AMD dividend
4.QQQ dividend 9.IWM dividend   4.CGC dividend
5.USO dividend 10.NIO dividend   5.LXRX dividend

Want more examples? CASY Dividend | CATM Dividend