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 Wed 4:16 PM ET):

Cummins, Inc (CMI)
Bid Ask Last Change Volume P/E Market Cap
165.00 167.05 166.17 -0.64 670K 13 26B

CMI Dividend-Like Income Using Covered Calls

With CMI at 166.17, 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% 4.99 1.4
5% 8.31 2.3
10% 16.62 4.6

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 26 167.50 0.40 3 13.3 0.45 (0.3%)
May 3 180.00 0.20 10 2.0 12.95 (7.8%)
5% Yield On CMI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 26 167.50 0.40 3 13.3 0.45 (0.3%)
May 3 177.50 0.35 10 3.5 10.45 (6.3%)
10% Yield On CMI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 26 167.50 0.40 3 13.3 0.45 (0.3%)
May 3 175.00 0.65 10 6.5 7.95 (4.8%)

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Top 10 Open Interest For May 17 Expiration     Top 5 High Yield
1.SPY dividend 6.QQQ dividend   1.GRUB dividend
2.COTY dividend 7.BAC dividend   2.TSLA dividend
3.EEM dividend 8.EWZ dividend   3.JNPR dividend
4.FXI dividend 9.XOP dividend   4.CLF dividend
5.SPX dividend 10.XLF dividend   5.FCX dividend

Want more examples? CMG Dividend | CMO Dividend