MCK Dividend

MCKESSON dividend

Although MCK has a dividend of 0.39 with an ex-dividend date of Aug 31, you can sell covered calls on MCKESSON to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):

MCKESSON (MCK)
Bid Ask Last Change Volume P/E Market Cap
122.72 128.92 127.09 +0.67 1.4M - 25B

MCK Dividend-Like Income Using Covered Calls

With MCK at 127.09, 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% 3.81 1.0
5% 6.35 1.7
10% 12.71 3.5

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 MCK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 133.00 0.10 9 1.1 4.08 (3.2%)
Aug 31 134.00 0.20 16 1.3 5.08 (4.0%)
5% Yield On MCK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 131.00 0.25 9 2.8 2.08 (1.6%)
Aug 31 133.00 0.30 16 1.9 4.08 (3.2%)
10% Yield On MCK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 130.00 0.45 9 5.0 1.08 (0.8%)
Aug 31 131.00 0.65 16 4.1 2.08 (1.6%)

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