CMI Dividend Type Payments

Cummins Inc. dividend

Although CMI has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Cummins Inc. to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):

Cummins Inc. (CMI)
Bid Ask Last Change Volume P/E Market Cap
275.00 304.00 291.42 +0.06 764K 57 41B

CMI Dividend-Like Income Using Covered Calls

With CMI at 291.42, 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% 8.74 2.4
5% 14.57 4.0
10% 29.14 8.0

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 CMI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 26 305.00 0.40 9 4.4 1.00 (0.3%)
May 3 302.50 3.10 16 10.0 0.00 (0.0%)
5% Yield On CMI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 26 305.00 0.40 9 4.4 1.00 (0.3%)
May 3 302.50 3.10 16 10.0 0.00 (0.0%)
10% Yield On CMI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 3 302.50 3.10 16 10.0 0.00 (0.0%)
May 10 305.00 3.00 23 13.0 1.00 (0.3%)

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Want more examples? CMG Dividend | CMLS Dividend