CMI Dividend

Cummins Inc. dividend

Although CMI has a dividend of 1.82 with an ex-dividend date of Nov 22, you can sell covered calls on Cummins Inc. to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):

Cummins Inc. (CMI)
Bid Ask Last Change Volume P/E Market Cap
350.05 379.70 361.85 -1.88 531K 24 50B

CMI Dividend-Like Income Using Covered Calls

With CMI at 361.85, here's a table showing how big the annual "dividend" (i.e. 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% 10.86 3.0
5% 18.09 5.0
10% 36.19 9.9

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 CMI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 20 380.00 2.45 36 6.8 0.30 (0.1%)
Jan 17 380.00 5.10 64 8.0 0.30 (0.1%)
5% Yield On CMI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 20 380.00 2.45 36 6.8 0.30 (0.1%)
Jan 17 380.00 5.10 64 8.0 0.30 (0.1%)
10% Yield On CMI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 21 380.00 12.60 127 9.9 0.30 (0.1%)

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Top 10 Open Interest For Dec 20 Expiration     Top 5 High Yield
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5.IWM dividend 10.KRE dividend   5.CRVS dividend

Want more examples? CMG Dividend | CMLS Dividend