When I invested in Conoco Philips, COP I expected to
receive annual income increases because COP is a dividend machine. I also expected price volatility. Price volatility can lead to covered call
income opportunities and indeed, COP provided that increased income over
time. But, the dividend and the covered
call income are not the gift of which I write.
Showing posts with label 2012 covered calls. Show all posts
Showing posts with label 2012 covered calls. Show all posts
Wednesday, November 14, 2012
Income Investor receives surprise gift.
Sunday, October 21, 2012
Covered
Call Income on Dividend Machines October 2012
Listed
below are the covered calls I currently have working on 2011 and 2012 dividend
machines. I think more posts on this
area of income investing will be useful and I will start today.
Conservative income
investors should learn to use covered calls for additional income. When you own
dividend machines you are, by definition a conservative investor. When you employ covered calls to boost
income on those very companies, you are a savvy investor.
Wednesday, October 10, 2012
Sunday, October 7, 2012
 |
| Microsoft wordmark. (Photo credit: Wikipedia) |
Microsoft,
MSFT dividend machine for week of October 8, 2012
I have been searching
for dividend yield for this blog (and my research project) every week for nearly two years and only today, did
Microsoft show up. In the past either
their dividend was too low or their stock price too high to make the minimum
dividend yield criteria.
Monday, August 20, 2012
I love the first Monday after options expiration. I have either make a lot of capital gains or I am presented with the opportunity to sell more calls on those dividend paying stocks. I retreat to "the counting house" and look at how I have done. Two examples are presented below.
Read more »
Friday, July 27, 2012
English: Third generation mobile phones (TD-SCDMA) for China Mobile (Dalian, China) (Photo credit: Wikipedia)This post if for those of you interested in international diversification. You've heard the old phrase "trust no man" (or woman for that matter.) Well in this case, you cannot trust foreign accounting; you can barely trust U.S. accounting. However, with that disclosure in mind, those of you who would like to add a little international diversification to your income portfolios consider China Mobile (CHT.)CHL is reported to have increasing earnings with their most recent report at $6.20 American. They pay out $2.25 dividend. The yield at today's price of about $57.60 is 3.9%. Their D/E is reportedly a very tolerable .30.
I have owned this company for some time and the dividend moves around with currency issues but I have made some additional money on calls. Here is one I'm taking today.
Have a great weekend. Another dividend machine next week.
Very Truly Yours,
TheMoneyMadam
Tuesday, July 10, 2012
English: A photo of Eli Lilly and Company's original laboratory located at 15 W. Pearl St, Indianapolis, Indiana. Photo was taken in 1876. The two people on the right side of the doorway are Colonel Eli Lilly (the taller one) and his 14 year old son Josiah K. Lilly (shorter one). The man on the left side is the only other other business employee. (Photo credit: Wikipedia) This blog concentrates on dividend machines, but other dividend producing companies can be good stocks for income investors to own. Companies that pay a dividend and have for a long time but do not warrant "dividend machine" status because they have not increased the payout every year, can provide even more income than a "dividend machine" if you can sell covered calls.
The "dividend machine" hurdle is high and the "almost dividend machine" is not much lower. I want to make sure you understand that in order to mitigate risk, I eliminate all companies with too much debt even if they increase the dividend every year. I also eliminate all companies whose last four quarters of earnings are less than their dividend payout.
When you apply those screens you find companies that have a dividend yield less than three percent but have increased it regularly; or you find a company that has a dividend yield greater than three percent but has not increased the payout regularly.
When you apply those screens you find companies that have a dividend yield less than three percent but have increased it regularly; or you find a company that has a dividend yield greater than three percent but has not increased the payout regularly.
Tuesday, June 5, 2012
Dividend Stocks for rent:
If you own stock in a company that has reliably paid a dividend over a long time and the stock price is volatile, you own a stock that can you can rent. When you sell covered calls, you rent your stock with an option to buy. You will find stocks to rent by looking for dividend machines. Your research will reveal companies that are not quite dividend machines but are darn good companies that pay dividends.
Monday, June 4, 2012
How to get a 6.7% yield in this market
Every once in a while, an opportunity in income investing presents that is hard to turn down. I noticed this trade late on Friday and it is still available today. You can invest a minimal amount of principal, about $2,350 in a company that has paid dividends every year since 2002. This is a company with very little debt. It sports a D/E ratio of .17. Because the dividend is less than three percent and it has not increased the dividend every year, this company does not qualify as a dividend machine. However, I have made a lot on income on companies I call almost dividend machines by selling covered calls.
Tuesday, May 8, 2012
Dear Income Investors:
Stick to your guns and employ your strategy even in a down market. Look at this August Intel call.
Very Truly Yours,
TheMoneyMadam
Read more »
Stick to your guns and employ your strategy even in a down market. Look at this August Intel call.
| CALL OPTION | INTC |
| Strike Price | $30.00 |
| Cost Basis | $27.12 |
| Call Premium | $0.37 |
| Dividend | $0.00 |
| Gain in $ if assigned | $3.25 |
| Call Yield | 1.23% |
| Gain Yield | 10.83% |
| Total Gain Yield | 10.83% |
TheMoneyMadam
Wednesday, April 25, 2012
You all know that I am not a journalist. I do not make a living writing about investing. In this blog; I record how I invest for income in an effort to help you invest for income.
With this in mind, I am again tempted to consider Qualcomm (QCOM) for income. During the existence of this web/blog, I have opined on Qualcomm no fewer than five times. I took the time to look at those posts and my investments in Qualcomm (QCOM) to see if this is such a good idea.
Tuesday, April 24, 2012
Dear Income Investors,
Making income in this market continues to be a challenge. Our 2011 dividend machines are producing greater than 4% yield but our 2012 dividend machines are producing about 3.8%. We need to look for other opportunities to boost our income.
Today I am looking at an international company that does not qualify as a dividend machine but is an almost dividend machine with call option potential. That company is TEVA Pharmacueticals (TEVA.)
Read more »
Making income in this market continues to be a challenge. Our 2011 dividend machines are producing greater than 4% yield but our 2012 dividend machines are producing about 3.8%. We need to look for other opportunities to boost our income.
Today I am looking at an international company that does not qualify as a dividend machine but is an almost dividend machine with call option potential. That company is TEVA Pharmacueticals (TEVA.)
Tuesday, March 27, 2012
Today's reality on Total is different then yesterday's idea. However, I am still going to use the technique of a covered call to create income and hopefully the call buyer will also purchase my shares because the strike price is so close to the current trading price.
Read more »
Monday, March 26, 2012
This post describes one of four covered call strategies that active investors use in today’s market.
Tuesday, March 6, 2012
Dividend Machine for Week of March 5, 2012 Nucor (NUE)
The market is weak today because of lingering international fears. We have the Greek debt crisis, Iran and Israel, and we have reports that the global economy is slowing. While it is counter intuitive to think that traders will pay you for a covered call when news is bad but sometimes traders see this as a chance to get in cheap. They do not buy the stock, they buy your call and have to put up only a fraction of the capital necessary to benefit if news improves. When we can get this kind of action on a dividend machine, it is a good opportunity for income investors.
Thursday, March 1, 2012
Caterpillar Call - again
TheMoneyMadam could not resist that title.
Caterpillar (CAT) is not a dividend machine but it has cultivated a lot of income for me. CAT provides consistent income and continues to increase your income. In fact, CAT’s history of increasing dividends stretches to 18 years.
Wednesday, February 29, 2012
It doesn't happen too often, but yesterday, the buyer of one of my covered calls, Lockheed Martin (LMT) executed the call and my stock was assigned well before the call expiration.
LMT was a 2011 dividend machine that I owned. LMT's fundamentals have changed and as I noted in my review of 2011 dividend machines, I cannot consider LMT for 2012's dividend machine list because the debt to equity ratio has gone way up.
Read more »
LMT was a 2011 dividend machine that I owned. LMT's fundamentals have changed and as I noted in my review of 2011 dividend machines, I cannot consider LMT for 2012's dividend machine list because the debt to equity ratio has gone way up.
Wednesday, February 8, 2012
Image via CrunchBase
Dividend Machine for week of February 6, 2012
Earlier this month I profiled a high yield (read high risk) bond and that is new. The stock market may seem boring but this week, so far, I have found two new companies that qualify as Dividend Machines but neither one has covered call options that could boost our income. And, I have been waiting to profile a third stock that I included in the 2011 Dividend Machine list until covered call options on it looked attractive.
Tuesday, January 31, 2012
Sometimes just waiting and seeing what is happening is the best move an income investor can make. You do not need to buy every day or even every week. I did finally get my Freeport McMoran trade at $45 and change and sold a $50 call but that is old news.
Read more »
Friday, January 27, 2012
I am awash in cash and want to make some income. My cash came from calls I wrote between 30 and 90 days ago that were taken. In other words, the call buyer paid me call income and then bought my stock from me at a tidy profit to me. I tried to buy Dividend Machines for this trade but I find more call income opportunities in what I call "almost dividend machines."
Read more »
