Apple has a 2% yield if you are lazy and a 15-25% yield if you are not. Do I have you attention?
Selling covered calls is almost a “no-brainer” way for you to collect income from the low dividend or “non-dividend” paying stocks sitting in your own portfolio right now.
I give seminars and ask questions, the first one always the same. “Who here owns some stocks for the long haul?” Even in an options trading session almost everyone raises their hands.
Then I ask “who sells calls against these stocks to generate cash and income from these positions?” Most of the hands disappear and the sheepish looks come out.
The covered call strategy isn’t for every stock in your portfolio, but it can work wonders for your “core” holdings…stocks you don’t want to let go of because you are still bullish and expect these “great companies” to continue to grow.
If his sounds like you, then sell calls, now. All you can lose is foregone profit if the stocks you own are not under water.
Here are 5 widely held names that are great stocks to sell calls and create your own cash dividend machine.
Apple (NASDAQ:AAPL) makes the best products on the planet, best brand on the planet, one of the best companies on the planet, a grossly undervalued stock. If you own a 100 shares, you must consider selling calls. If you are afraid of being called out, sell out of the money weekly calls at two o’clock on Friday, every Friday, generate a yearly return of 7% or more. Sell a mix of weeklies and monthlies and manage them well and you can generate mo re than 20% a year in yield.
Oil giant Chevron (NYSE:CVX) is in a great spot: 0il prices are now nearing $100 – time to sell calls on long term oil company holdings. Chevron has a 3.2%$ yield – sell calls every month – perhaps every two months – and that can go up to 2% or more. Oil is going to trade between $80 and $110 for years, barring a geopolitical crisis, this is a great way to create a d “double dividend” from a strong stock.
We may be eating better but everyone — well, anyone worth mentioning — still likes to drink Coca-Cola (NSYE:KO) or a Coke product. This is the ultimate long term slow grower but it can be the basis of up to a 10% yield if you are sell calls, a lot more than the current dividend yield of 2.7%.
Speaking of food we should not consume in large quantities, McDonald’s (NYSE:MCD) is a company growing faster than the economy, and that dollar menu plus coffee is working wonders for this iconic brand and company. The company will flourish as the next recession hits by year end as people trade down form more expensive brands. The yield is already 3% or more, you can boost that, if you are active, to 12% or more by selling calls.
I like Verizon (NYSE:VZ) not just as a long-term play but a stock to buy, sell calls against, pocket the cash and then sell the stock – and then do it all again when you see the stock bottoming. I have done this is my service Options Income Blueprint several times. The stock already yields 5% — you can make that 10% or more depending on how you manage your call positions.