MCD Dividend

MCDONALD'S dividend

Although MCD has a dividend of 1.16 with an ex-dividend date of Nov 30, 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 Tue 4:16 PM ET):

MCDONALD'S (MCD)
Bid Ask Last Change Volume P/E Market Cap
184.05 185.00 184.01 -0.36 2.2M 28 142B

MCD Dividend-Like Income Using Covered Calls

With MCD at 184.01, 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% 5.52 1.5
5% 9.20 2.5
10% 18.40 5.0

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
Nov 16 187.50 0.26 4 6.5 2.50 (1.4%)
Nov 23 190.00 0.26 11 2.4 5.00 (2.7%)
5% Yield On MCD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 187.50 0.26 4 6.5 2.50 (1.4%)
Nov 23 187.50 0.72 11 6.5 2.50 (1.4%)
10% Yield On MCD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 187.50 0.26 4 6.5 2.50 (1.4%)
Nov 23 187.50 0.72 11 6.5 2.50 (1.4%)

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Top 10 Open Interest For Nov 16 Expiration     Top 5 High Yield
1.SPY dividend 6.PBR dividend   1.TLRY dividend
2.EEM dividend 7.IWM dividend   2.NVDA dividend
3.EWZ dividend 8.FXI dividend   3.M dividend
4.SPX dividend 9.BAC dividend   4.AMRN dividend
5.QQQ dividend 10.VXX dividend   5.CGC dividend

Want more examples? MCC Dividend | MCEP Dividend