Selling covered calls I probably love even more than selling naked puts, unfortunately, there are not many good stocks in my portfolio I could sell covered calls to generate decent monthly income yet, but I have a few candidates.
In today's article, I'm going to speak about selling covered calls on AT&T, Pfizer, and Cisco systems.
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On March 3, 2020, I bought 100 shares of Cisco Systems, Inc. (CSCO) paying $47.5 per share. With its quarterly dividend payout of 0.36 dollars per share, this latest buy has a dividend yield of 3.03% (before tax) and will pay us an additional $36 (before tax) every quarter.
It was not planned to take 100 shares now, but as the stock plummeted down to $40, it seemed a bit pricey to buy back my original put (on which I would lose $700) I decided to use margin (buying power) and took the assignment.
This is already the second time buying CSCO stock for our 20-month old baby daughter.
Without hesitation, I can say - our 20-month-old baby girl has a dividend portfolio generating already $83.58/mo.
Now, our baby girl's portfolio now has as TTM at $1,002.96, giving daily $2.75 and hourly $0.11. Awesome we have cracked $1,000 milestone.
I believe we will reach $100/mo by the time she will turn 2.
For the rest of the year, we are looking to get an additional dividend income of $91.8 (after tax) from this stock buy which is about 2.55% from our $3,600 goal
2019 in Review and Financial Goals for 2020
By now CSCO takes 19.37% from our US stock portfolio. This is huge and will take a long time before it will go down to more reasonable under 10%.
There are no more plans to buy CSCO for the rest of 2020, instead, I will write covered calls to generate income.
About Cisco Systems
Cisco Systems, Inc. is an American multinational technology conglomerate headquartered in San Jose, California, in the center of Silicon Valley. Cisco develops, manufactures and sells networking hardware, software, telecommunications equipment and other high-technology services and products. Through its numerous acquired subsidiaries, such as OpenDNS, Webex, Jabber and Jasper, Cisco specializes into specific tech markets, such as Internet of Things (IoT), domain security and energy management. Cisco is incorporated in California.
Cisco stock was added to the Dow Jones Industrial Average on June 8, 2009, and is also included in the S&P 500 Index, the Russell 1000 Index, NASDAQ-100 Index and the Russell 1000 Growth Stock Index.
Cisco Systems was founded in December 1984 by Leonard Bosack and Sandy Lerner, two Stanford University computer scientists. They pioneered the concept of a local area network (LAN) being used to connect geographically disparate computers over a multiprotocol router system. By the time the company went public in 1990, Cisco had a market capitalization of $224 million. By the end of the dot-com bubble in the year 2000, Cisco had a more than $500 billion market capitalization.
