Wednesday, October 10, 2012

Covered Call Income on DOW

I was looking for covered call income today.  DOW peaked my interest.

Dow Chemical is volatile in product and in stock price.   Although it is not a dividend machine, it provides a greater than 4 percent yield and because it is volatile in price, it provides covered call income opportunities.

The two tables below present the data on DOW as a dividend company and a potential call to boost income.

Dividend Stock DOW
Price when profiled $28.10
Last 4 Qtrs Earnings $1.58
Last 4 Qtrs Dividends $1.14
Current Qtr Dividend $0.32
Annualized Div Yield 4.56%
No. Years Div Increase 1
Debt/Equity ratio 89.00%

Strike Price $30.00
Cost Basis $28.10
Call Premium $0.57
Dividend $0.00
Gain in $ if assigned $2.47
Call Yield 1.90%
Gain Yield 8.23%
Total Gain Yield 8.23%

Just trying to make a living without working.

Very Truly Yours,


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