MCD Dividend Type Payments

MCDONALD'S dividend

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

MCDONALD'S (MCD)
Bid Ask Last Change Volume P/E Market Cap
157.89 159.35 158.78 +0.27 2.8M 24 125B

MCD Dividend-Like Income Using Covered Calls

With MCD at 158.78, 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% 4.76 1.3
5% 7.94 2.2
10% 15.88 4.4

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 MCD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 20 162.50 0.11 5 2.2 3.15 (2.0%)
Jul 27 170.00 0.19 12 1.6 10.65 (6.7%)
5% Yield On MCD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 20 162.50 0.11 5 2.2 3.15 (2.0%)
Jul 27 167.50 0.35 12 2.9 8.15 (5.1%)
10% Yield On MCD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 20 160.00 0.52 5 10.4 0.65 (0.4%)
Jul 27 165.00 0.73 12 6.1 5.65 (3.6%)

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Want more examples? MCC Dividend | MCEP Dividend