MRK Dividend Type Payments

Merck & Company, Inc. (new) dividend

Although MRK has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Merck & Company, Inc. (new) 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):

Merck & Company, Inc. (new) (MRK)
Bid Ask Last Change Volume P/E Market Cap
97.91 98.09 97.92 -2.78 15.9M 21 255B

MRK Dividend-Like Income Using Covered Calls

With MRK at 97.92, 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% 2.94 0.8
5% 4.90 1.3
10% 9.79 2.7

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 MRK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 7 100.00 2.01 22 9.1 1.91 (2.0%)
Feb 14 100.00 2.19 29 7.6 1.91 (2.0%)
5% Yield On MRK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 7 100.00 2.01 22 9.1 1.91 (2.0%)
Feb 14 100.00 2.19 29 7.6 1.91 (2.0%)
10% Yield On MRK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 7 100.00 2.01 22 9.1 1.91 (2.0%)
Feb 14 100.00 2.19 29 7.6 1.91 (2.0%)

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