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 Thu 4:16 PM ET):

AT&T Inc. (T)
Bid Ask Last Change Volume P/E Market Cap
27.51 27.52 27.47 -0.63 28.8M 17 202B

T Dividend-Like Income Using Covered Calls

With T at 27.47, 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% 0.82 0.2
5% 1.37 0.4
10% 2.75 0.8

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
Jun 6 28.00 0.54 30 1.8 0.48 (1.7%)
Jun 13 28.00 0.62 37 1.7 0.48 (1.7%)
5% Yield On T Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 6 28.00 0.54 30 1.8 0.48 (1.7%)
Jun 13 28.00 0.62 37 1.7 0.48 (1.7%)
10% Yield On T Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 6 28.00 0.54 30 1.8 0.48 (1.7%)
Jun 13 28.00 0.62 37 1.7 0.48 (1.7%)

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