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 Thu 4:16 PM ET):

Merck & Company, Inc. (new) (MRK)
Bid Ask Last Change Volume P/E Market Cap
77.97 78.60 78.00 +1.54 20.0M 11 193B

MRK Dividend-Like Income Using Covered Calls

With MRK at 78.00, 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% 2.34 0.6
5% 3.90 1.1
10% 7.80 2.1

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
May 2 79.00 2.20 16 13.8 0.40 (0.5%)
May 9 79.00 2.56 23 11.1 0.40 (0.5%)
5% Yield On MRK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 2 79.00 2.20 16 13.8 0.40 (0.5%)
May 9 79.00 2.56 23 11.1 0.40 (0.5%)
10% Yield On MRK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 2 79.00 2.20 16 13.8 0.40 (0.5%)
May 9 79.00 2.56 23 11.1 0.40 (0.5%)

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