MCD Dividend
Although MCD has a dividend of 1.67 with an ex-dividend date of Sep 3, you can sell covered calls on McDonald's Corporation to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):
McDonald's Corporation (MCD) | ||||||
---|---|---|---|---|---|---|
Bid | Ask | Last | Change | Volume | P/E | Market Cap |
251.00 | 252.00 | 252.00 | +0.54 | 4.0M | 21 | 181B |
MCD Dividend-Like Income Using Covered Calls
With MCD at 252.00, 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% | 7.56 | 2.1 |
5% | 12.60 | 3.5 |
10% | 25.20 | 6.9 |
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 MCD Using Covered Calls | ||||||
---|---|---|---|---|---|---|
Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
Aug 2 | 252.50 | 5.55 | 8 | 69.4 | 0.50 (0.2%) | |
Aug 9 | 252.50 | 6.15 | 15 | 41.0 | 0.50 (0.2%) |
5% Yield On MCD Using Covered Calls | ||||||
---|---|---|---|---|---|---|
Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
Aug 2 | 252.50 | 5.55 | 8 | 69.4 | 0.50 (0.2%) | |
Aug 9 | 252.50 | 6.15 | 15 | 41.0 | 0.50 (0.2%) |
10% Yield On MCD Using Covered Calls | ||||||
---|---|---|---|---|---|---|
Expiration | Strike | Call Bid | Days | Cents/Day | Upside Potential | |
Aug 2 | 252.50 | 5.55 | 8 | 69.4 | 0.50 (0.2%) | |
Aug 9 | 252.50 | 6.15 | 15 | 41.0 | 0.50 (0.2%) |
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Top 10 Open Interest For Aug 16 Expiration | Top 5 High Yield | |||||
---|---|---|---|---|---|---|
1. | NVDA dividend | 6. | TSLA dividend | 1. | SNAP dividend | |
2. | IWM dividend | 7. | SIRI dividend | 2. | TDOC dividend | |
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Want more examples? MCBC Dividend | MCFT Dividend