T Dividend Type Payments

AT&T Inc. dividend

Although T has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on AT&T Inc. 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):

AT&T Inc. (T)
Bid Ask Last Change Volume P/E Market Cap
23.51 23.57 23.59 +0.01 36.0M 7.7 167B

T Dividend-Like Income Using Covered Calls

With T at 23.59, 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% 0.71 0.2
5% 1.18 0.3
10% 2.36 0.6

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 T Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 6 23.50 0.64 15 3.8 0.00 (0.0%)
Feb 13 24.00 0.43 22 2.0 0.43 (1.8%)
5% Yield On T Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 6 23.50 0.64 15 3.8 0.00 (0.0%)
Feb 13 24.00 0.43 22 2.0 0.43 (1.8%)
10% Yield On T Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 6 23.50 0.64 15 3.8 0.00 (0.0%)
Feb 13 24.00 0.43 22 2.0 0.43 (1.8%)

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