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
89.06 89.30 89.23 +1.63 12.4M 13 221B

MRK Dividend-Like Income Using Covered Calls

With MRK at 89.23, 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% 2.68 0.7
5% 4.46 1.2
10% 8.92 2.4

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 2 100.00 0.40 36 1.1 10.70 (12.0%)
Apr 4 89.00 1.69 8 17.4 0.00 (0.0%)
5% Yield On MRK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 2 89.00 3.65 36 9.3 0.00 (0.0%)
Apr 4 89.00 1.69 8 17.4 0.00 (0.0%)
10% Yield On MRK Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 2 89.00 3.65 36 9.3 0.00 (0.0%)
Apr 4 89.00 1.69 8 17.4 0.00 (0.0%)

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