2 Blue Chip Dividend Stocks Going Ex-Dividend Soon, With High Options Yields

by Robert Hauver
Looking for a safe way to increase your yields?
Our DoubleDividendStocks.com investing service has been specializing in combining options-selling with high dividend stocks since 2009.

Our Covered Calls Table features over 25 covered calls trades, which we update throughout each reading day. Two trades that caught our attention this week are for blue chip dividend stocks Boeing, (BA), and Intel, (INTC).

Both BA and INTC go ex-dividend in early August:  BA goes ex-dividend ~8/9/18, and INTC goes ex-dividend ~8/6/18. They both have conservative payout ratios, but a relatively low dividend yield.

Options:
Although neither one is in the realm of high divided stocks, you can make up for that, via selling covered calls. The August quarterly dividends make for an attractive setup for these covered call plays.
For BA, we chose a $365.00 call strike which is ~3% above its current $354.44 price/share. This call strike pays $5.20, with a tight bid/ask of $5.20/$5.30.
The $5.20 call option payout is ~3X BA’s quarterly $1.71 dividend. It transforms it from a ~7% annualized yield to a ~21% annualized yield, since the trade has just 25 days until it expires.

Here’s a breakdown of the 3 profitable scenarios for the BA trade. Since the $365.00 call strike is $10.56 above BA’s price/share, there’s ample compensation for potentially missing out on the quarterly $1.71 dividend, if the shares rise to $365.00 and get called away prior to the August ex-dividend date. We listed the nominal yields for each scenario:

The INTC trade is right at the money, with a $52.50 call strike, vs. INTC’s $52.30 price/share. The call bid of $1.44 is well over 4X INTC’s $.30 quarterly dividend.

Since both BA and INTC have had very strong price gains in the past year, and are fairly close to their 52-week highs, here’s another strategy to consider.
We’ve added these August put-selling trades to our Cash Secured Puts Table, which has over 30 trades that are updated throughout each trading day.
The August $345.00 BA put strike pays $6.40, which is well over 3X BA’s quarterly dividend, and offers a breakeven of $338.60.
The INTC August $50.00 put pays $.81, which is over 2X INTC’s $.30 quarterly dividend, and has a breakeven of $49.19.
There are plenty of other Put option and Call option strike prices you can choose from. As you get further away, (higher) from the underlying stock’s price/share, the call option bid premiums are lower in value. Conversely, lower put strikes don’t pay as much as those which are closer to the underlying stock’s price/share. One other note – put sellers don’t receive dividends.

Performance:
As we noted above, both BA and INTC have had quite a price run over the past year – BA is up 68.77% and INTC is up 49.38%.

Price Targets:
At their current prices, both BA and ~12% below analysts’ consensus target prices.

Financials:
That bodacious ROE figure for BA isn’t a typo – BA’s management has opted to use more debt than equity in financing its growth over the years. So, its ROE is very high, but its Debt/Equity ratio is also quite high, vs. industry averages.
Like BA, INTC has stronger than average ROA, ROE, and ROI figures, and also has a much better Operating Margin. Its Debt/Equity ratio is higher than industry averages, but not nearly as much as BA’s is.

All tables furnished by DoubleDividendStocks.com, unless otherwise noted.

Disclaimer: This article was written for informational purposes only, and is not intended as personal investment advice. Please practice due diligence before investing in any investment vehicle mentioned in this article.

Disclosure:
Author owns no shares of BA or INTC at present time.
Copyright 2018 RH Group Inc. All Rights Reserved.

Stock Market News: 4/21/18

How is your portfolio handling the up and down market of 2018?

Click here to learn how Selling Options can take advantage of higher Volatility, giving you more downside protection and more income.

Markets: It was an up week for the market, with all 4 indexes posting gains, led by the Russell small caps. The week ended on a down day, though, investors grew leery of rising bond yields and rising inflation. The 10-Year Treasury note rose to 2.956% on Friday, the highest since January 2014. Stocks have been more sensitive to bond prices recently, as the 10-year yield approaches 3%. Click here to read more…

Stock Market News: 4/14/18

Markets: It was an up week for the market, with all 4 indexes posting strong gains, as the market turned in its best performance in a month. Trade war fears ebbed, but investors were unimpressed on Friday by good major bank earnings reports, sending the market down in late trading. Even though JPM, C, and WFC beat earnings estimates, investors were expecting more, due to the anticipated benefits from the tax cut bill. These 3 banks fell from -1.5% to 3.4% on Friday.

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High Options Yields From A Blue Chip Mouse

Did you grow up watching Uncle Walt every Sunday night on the “wonderful World Of Disney”? Or maybe you had your own Mouseketeer hat?
These days, the Mouse hasn’t been getting much respect from Mr. Market, who has been acting like a house cat, with respect to Walt Disney co., (DIS), shares.

The problem is cord-cutting, and how it affects ESPN, one of Disney’s premier cable cash machines. As millennials opt out of bundled cable packages, ESPN has seen sales declines, and the price/share has struggled in the past year.
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Stock Market News – 11/04/17

Markets: The market rallied once again this week, with the S&P 500, and DOW hitting new highs, and the NASDAQ rallying as well, but, once again, Small caps didn’t join the party, and were down -.79% for the week.

October was a big month for the market, which saw the DOW rise over 4%, the S&P gain 2.2%; the NASDAQ up 3.6%; and small caps gain .73%:

Futures: WTI Crude futures rose 10.5% in October, natural gas also gained 3.4%.
World stock markets notched up a fresh record high on Wednesday, powered by a 3% jump in basic resources shares after oil prices hit their highest since mid-2015. Click here to read more…

Tech Dividend Stocks With High Options Yields

by Robert Hauver
Who are the winners so far in 2017? We looked at sectors from a variety of angles – trailing valuations, future earnings valuations, dividend yield, and performance, to see which sectors have outperformed, and which ones hold the most promise for the future.

Not surprisingly, Tech was a clear winner in Performance- it leads all other sectors so far in 2017:

Click here to read more…

Stock Market News: 9-30-17


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Markets: The market rallied this week, with the DOW, the S&P, and theRussell 2000 all making new all-time highs. The RUSSELL small caps went gangbusters in Sept., gaining over 6% in 1 month. The DOW and S&P both added ~ 2% for the month.

“For the first time in over three years, each of the three major Dow stock market averages has just hit a new all-time high the Dow Jones Industrial Average, Dow Jones Transportation Average, and Dow Jones Utility Average. This development is rare: Its happened in fewer than 4% of the months since 1970. But here’s the even better news: Never have any of these prior events occurred at a bull market top. The least bullish of any prior occurrences (which came in the spring of 2007) still came five months before a top”.

“To be sure, investors usually don’t pay much attention to the Dow utilities. Most of us focus just on the Dow industrials. And among those who focus on Dow averages beyond the Dow industrials, most focus on just the Dow transports. That’s because of the famous Dow Theory, the oldest market timing system that remains in widespread use today, which holds that joint new highs of both averages is confirmation that were in a bull market.”(Source: MarketWatch)

Dividend Stocks Update: These high dividend stocks go ex-dividend this coming week: Click here to read more…

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by Robert Hauver
Looking for dividend stocks with a long term record of dividend increases? The S&P Dividend Aristocrats index contains 50 such stocks, all of which have increased their dividends paid per share yearly for the past consecutive 25 years.
This group contains many household names across various industries – some of the largest companies on the planet. Here are the top 15 companies, sorted by market cap. Healthcare giant Johnson & Jonson, (JNJ), tops the list, followed by Exxon Mobil, (XOM), after which the market cap drops to the mid-$200B range, with Procter & Gamble, (PG), Walmart, (WMT), and AT&T, (T):

The sector breakdown shows Consumer Staples as the leading weighted sector in the index by far, with a 26% weighting, followed by Industrials, with 17.4%, and Healthcare, with 13.4%: Click here to read more…