MRK Dividend

Although MRK has a dividend of 0.81 with an ex-dividend date of Mar 17, 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
94.50	94.83	94.57	-0.14	12.7M	14	239B

MRK Dividend-Like Income Using Covered Calls

With MRK at 94.57, 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%	2.84	0.8
5%	4.73	1.3
10%	9.46	2.6

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
Apr 4	101.00	0.19	22	0.9	6.17 (6.5%)
Apr 11	100.00	0.48	29	1.7	5.17 (5.5%)

5% Yield On MRK Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Apr 4	95.00	1.82	22	8.3	0.17 (0.2%)
Apr 11	100.00	0.48	29	1.7	5.17 (5.5%)

10% Yield On MRK Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
Apr 4	95.00	1.82	22	8.3	0.17 (0.2%)
Apr 11	95.00	2.27	29	7.8	0.17 (0.2%)

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Want more examples? MRCY Dividend | MRNA Dividend