MERC Dividend

Although MERC has a dividend of 0.13 with an ex-dividend date of Sep 25, you can sell covered calls on MERCER INTL 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):

MERCER INTL (MERC)
Bid Ask Last Change Volume P/E Market Cap
17.10 17.35 17.25 0.00 179K 11 1.1B

MERC Dividend-Like Income Using Covered Calls

With MERC at 17.25, 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% 0.52 0.1
5% 0.86 0.2
10% 1.73 0.5

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 MERC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 17.50 0.15 36 0.4 0.15 (0.9%)
Nov 16 20.00 0.15 92 0.2 2.65 (15.4%)
5% Yield On MERC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 17.50 0.15 36 0.4 0.15 (0.9%)
Nov 16 17.50 0.70 92 0.8 0.15 (0.9%)
10% Yield On MERC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 17.50 0.70 92 0.8 0.15 (0.9%)
Feb 15 17.50 1.15 183 0.6 0.15 (0.9%)

Want to increase dividends with covered calls?  Sign Up For A Free Trial

 
Top 10 Open Interest For Sep 21 Expiration     Top 5 High Yield
1.EEM dividend 6.GE dividend   1.COTY dividend
2.SPY dividend 7.GLD dividend   2.LB dividend
3.SPX dividend 8.FB dividend   3.AKRX dividend
4.QQQ dividend 9.IWM dividend   4.UVXY dividend
5.XLF dividend 10.GDX dividend   5.GPS dividend

Want more examples? MEOH Dividend | MESO Dividend