M Dividend

Macy's, Inc dividend

Although M has a dividend of 0.38 with an ex-dividend date of Dec 13, you can sell covered calls on Macy's, Inc 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):

Macy's, Inc (M)
Bid Ask Last Change Volume P/E Market Cap
31.30 32.00 31.84 -0.05 5.3M - 0.0B

M Dividend-Like Income Using Covered Calls

With M at 31.84, 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% 0.96 0.3
5% 1.59 0.4
10% 3.18 0.9

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 M Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 14 34.00 0.02 4 0.5 2.00 (6.3%)
Dec 21 35.50 0.04 11 0.4 3.50 (11.0%)
5% Yield On M Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 14 34.00 0.02 4 0.5 2.00 (6.3%)
Dec 21 35.00 0.06 11 0.5 3.00 (9.4%)
10% Yield On M Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 14 33.50 0.04 4 1.0 1.50 (4.7%)
Dec 21 34.50 0.11 11 1.0 2.50 (7.9%)

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Top 10 Open Interest For Dec 21 Expiration     Top 5 High Yield
1.DUST dividend 6.NSSC dividend   1. dividend
2.NOVT dividend 7.MOD dividend   2. dividend
3.MMS dividend 8.VV dividend   3. dividend
4.VSI dividend 9.EC dividend   4. dividend
5.DXJS dividend 10.NTWK dividend   5. dividend

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