MO Dividend

Altria Group, Inc. dividend

Although MO has a dividend of 1.02 with an ex-dividend date of Dec 26, you can sell covered calls on Altria Group, Inc. to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):

Altria Group, Inc. (MO)
Bid Ask Last Change Volume P/E Market Cap
53.00 53.07 52.99 -0.26 8.9M 9.0 90B

MO Dividend-Like Income Using Covered Calls

With MO at 52.99, 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% 1.59 0.4
5% 2.65 0.7
10% 5.30 1.5

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 MO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 27 53.00 0.29 9 2.4 0.00 (0.0%)
Jan 3 53.00 0.37 16 1.9 0.00 (0.0%)
5% Yield On MO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 27 53.00 0.29 9 2.4 0.00 (0.0%)
Jan 3 53.00 0.37 16 1.9 0.00 (0.0%)
10% Yield On MO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 27 53.00 0.29 9 2.4 0.00 (0.0%)
Jan 3 53.00 0.37 16 1.9 0.00 (0.0%)

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