T Dividend Type Payments

AT&T dividend

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

AT&T (T)
Bid Ask Last Change Volume P/E Market Cap
31.80 31.89 31.90 +0.23 33.0M 6.4 232B

T Dividend-Like Income Using Covered Calls

With T at 31.90, 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% 0.96 0.3
5% 1.60 0.4
10% 3.19 0.9

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
Jul 20 32.50 0.03 5 0.6 0.61 (1.9%)
Jul 27 34.00 0.04 12 0.3 2.11 (6.6%)
5% Yield On T Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 20 32.50 0.03 5 0.6 0.61 (1.9%)
Jul 27 33.50 0.09 12 0.8 1.61 (5.0%)
10% Yield On T Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 20 32.00 0.15 5 3.0 0.11 (0.3%)
Jul 27 33.00 0.17 12 1.4 1.11 (3.5%)

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Want more examples? SZO Dividend | TA Dividend