IBM Dividend Type Payments
Although IBM has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on International Business Machines Corporation to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 11:30 AM ET):
| International Business Machines Corporation (IBM) | ||||||
|---|---|---|---|---|---|---|
| Bid | Ask | Last | Change | Volume | P/E | Market Cap |
| 267.17 | 267.29 | 267.24 | +0.48 | 894K | 46 | 248B |
IBM Dividend-Like Income Using Covered Calls
With IBM at 267.24, 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% | 8.02 | 2.2 |
| 5% | 13.36 | 3.7 |
| 10% | 26.72 | 7.3 |
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 IBM Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Jun 6 | 267.50 | 5.00 | 19 | 26.3 | 0.21 (0.1%) | |
| Jun 13 | 270.00 | 4.65 | 26 | 17.9 | 2.71 (1.0%) | |
| 5% Yield On IBM Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Jun 6 | 267.50 | 5.00 | 19 | 26.3 | 0.21 (0.1%) | |
| Jun 13 | 270.00 | 4.65 | 26 | 17.9 | 2.71 (1.0%) | |
| 10% Yield On IBM Using Covered Calls | ||||||
|---|---|---|---|---|---|---|
| Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
| Jun 6 | 267.50 | 5.00 | 19 | 26.3 | 0.21 (0.1%) | |
| Jun 13 | 270.00 | 4.65 | 26 | 17.9 | 2.71 (1.0%) | |
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| Top 10 Open Interest For Jun 20 Expiration | Top 5 High Yield | |||||
|---|---|---|---|---|---|---|
| 1. | NVDA dividend | 6. | EEM dividend | 1. | VERA dividend | |
| 2. | SPY dividend | 7. | GLD dividend | 2. | HIMS dividend | |
| 3. | SLV dividend | 8. | FXI dividend | 3. | MRUS dividend | |
| 4. | QQQ dividend | 9. | TSLA dividend | 4. | ACHR dividend | |
| 5. | IWM dividend | 10. | XLF dividend | 5. | CAPR dividend | |
Want more examples? IBKR Dividend | IBN Dividend
