MCD Dividend

Although MCD has a dividend of 1.86 with an ex-dividend date of Mar 3, you can sell covered calls on McDonald's Corporation to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 2:35 PM ET):

McDonald's Corporation (MCD)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
329.58	329.80	329.69	+6.48	4.2M	28	230B

MCD Dividend-Like Income Using Covered Calls

With MCD at 329.69, 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%	9.89	2.7
5%	16.48	4.5
10%	32.97	9.0

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 MCD Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Feb 20	330.00	3.45	9	38.3	0.20 (0.1%)
Feb 27	330.00	4.65	16	29.1	0.20 (0.1%)

5% Yield On MCD Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Feb 20	330.00	3.45	9	38.3	0.20 (0.1%)
Feb 27	330.00	4.65	16	29.1	0.20 (0.1%)

10% Yield On MCD Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Feb 20	330.00	3.45	9	38.3	0.20 (0.1%)
Feb 27	330.00	4.65	16	29.1	0.20 (0.1%)

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Want more examples? MCB Dividend | MCFT Dividend