CMI Dividend Type Payments

CUMMINS dividend

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

CUMMINS (CMI)
Bid Ask Last Change Volume P/E Market Cap
146.00 152.41 149.06 -1.94 644K 27 25B

CMI Dividend-Like Income Using Covered Calls

With CMI at 149.06, 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% 4.47 1.2
5% 7.45 2.0
10% 14.91 4.1

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
May 25 152.50 0.15 4 3.8 0.09 (0.1%)
Jun 1 155.00 0.25 11 2.3 2.59 (1.7%)
5% Yield On CMI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 25 152.50 0.15 4 3.8 0.09 (0.1%)
Jun 1 155.00 0.25 11 2.3 2.59 (1.7%)
10% Yield On CMI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 1 152.50 0.65 11 5.9 0.09 (0.1%)
Jun 8 152.50 1.25 18 6.9 0.09 (0.1%)

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

 
Top 10 Open Interest For Jun 15 Expiration     Top 5 High Yield
1.SPY dividend 6.QQQ dividend   1.URBN dividend
2.EEM dividend 7.BAC dividend   2.CHK dividend
3.SPX dividend 8.HYG dividend   3.UVXY dividend
4.GE dividend 9.IWM dividend   4.GPS dividend
5.XLF dividend 10.EFA dividend   5.TXMD dividend

Want more examples? CMG Dividend | CMO Dividend