MRK Dividend Type Payments

MERCK dividend

Although MRK has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on MERCK 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):

MERCK (MRK)
Bid Ask Last Change Volume P/E Market Cap
58.49 58.65 58.57 -0.57 7.9M 100 159B

MRK Dividend-Like Income Using Covered Calls

With MRK at 58.57, 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% 1.76 0.5
5% 2.93 0.8
10% 5.86 1.6

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 MRK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 25 60.50 0.03 5 0.6 1.85 (3.2%)
Jun 1 61.00 0.06 12 0.5 2.35 (4.0%)
5% Yield On MRK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 25 60.00 0.07 5 1.4 1.35 (2.3%)
Jun 1 60.50 0.13 12 1.1 1.85 (3.2%)
10% Yield On MRK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 25 59.50 0.17 5 3.4 0.85 (1.5%)
Jun 1 60.00 0.21 12 1.8 1.35 (2.3%)

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

 
Top 10 Open Interest For Jun 15 Expiration     Top 5 High Yield
1.SPY dividend 6.QQQ dividend   1.GPS dividend
2.EEM dividend 7.BAC dividend   2.TXMD dividend
3.SPX dividend 8.HYG dividend   3.CHK dividend
4.GE dividend 9.IWM dividend   4.UVXY dividend
5.XLF dividend 10.EFA dividend   5.I dividend

Want more examples? MRIN Dividend | MRLN Dividend