Wednesday, April 20, 2011

FCX Freeport McMoran - income machine

          Well income investors, Freeport McMoran, symbol FCX has been the subject of several posts in this blog.  As I search for more income today, I find FCX an income machine again.

           If you own FCX by May 15, 2011, you will receive an extra, special $.50 dividend.  That means if you owned it during the time I have been covering it, you will receive the regular quarterly dividend of $.25 on May 1st.  You may have also received the previous special dividend of $.50 and the stock split. 

           You could start your position today and still make money; but remember this is a risky stock in that the price of copper could change quickly.   If you buy today at about $53.35 and write an August call at a strike price of $60 you will receive the following income:  $.50 special dividend, $2.00 call premium and most likely a regular dividend of $.25 in August.  Total income $2.75 plus the capital gain of $6.65 if your FCX gets taken.  I'll take a 17.65% gain in just 4 months.

Income investors cannot just depend on dividend machines; almost dividend machines with good price action and call income can help fill your coffers.

Very Truly Yours,