CNI Dividend

Although CNI has a dividend of 0.62 with an ex-dividend date of Mar 10, you can sell covered calls on Canadian National Railway Company to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 3:05 PM ET):

Canadian National Railway Company (CNI)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
101.79	101.84	101.83	-2.16	783K	21	82B

CNI Dividend-Like Income Using Covered Calls

With CNI at 101.83, 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%	3.05	0.8
5%	5.09	1.4
10%	10.18	2.8

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 CNI Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Apr 17	105.00	1.90	53	3.6	3.16 (3.1%)
Oct 17	105.00	5.70	236	2.4	3.16 (3.1%)

5% Yield On CNI Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Apr 17	105.00	1.90	53	3.6	3.16 (3.1%)
Oct 17	105.00	5.70	236	2.4	3.16 (3.1%)

10% Yield On CNI Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Apr 17	105.00	1.90	53	3.6	3.16 (3.1%)
Jul 18	105.00	4.10	145	2.8	3.16 (3.1%)

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Want more examples? CNH Dividend | CNK Dividend