29 March, 2023 seen 3,451Selling naked puts on dividend stocks is one of my favorite income-generating strategies. I've been selling options…
On January 16, 2020, I bought 17 shares of Cisco Systems, Inc. (CSCO) paying $48.35 per share. With its quarterly dividend payout of 0.35 dollars per share, this latest buy has a dividend yield of 2.89% (before tax) and will pay us an additional $5.95 (before tax) every quarter. Not the biggest dividend, but every bit counts!
I bought the CSCO stock for our child portfolio. To finance this purchase I sold CLM stock and added some funds, see: Latest Stock Sale: CLM
Without hesitation, I can say - our 18-month-old baby girl has a dividend portfolio generating already $82.52/mo.
I really like CSCO over CLM much better, mainly because CSCO is stock from Dow Jones list and I can sell options on it. The dividend is pretty humble I agree, but I could compensate that by selling options. CSCO just like PFE (which I bought for my partner) is on the Dogs of the Dow list. I see that in the future I will buy more stocks from this list.
Now, our baby girl's portfolio now has as TTM at $990.24, giving daily $2.71 and hourly $0.11. We have slipped a lit bit under $1,000 since our latest buy in December, see Latest Stock Buy For Child Investment Portfolio: 70 Shares of EDI, but that's because I sold CLM which gave enormous 20% dividend yield and bought CSCO which doesn't even reach 3% yield.
I believe we will reach $100/mo by the time she will turn 2.
For 2020, we are looking to get an additional dividend income of $15.17 (after tax) from this stock buy,
By now CSCO takes 3.94% from our US stock portfolio
I will increase our stake with CSCO for sure in 2020. To do that I will write near the money naked puts.
Actually, despite planned humble dividend for this year I'm looking to take some $300-$400 income from options trading with CSCO this year. In other words, speaking I'm looking on a 20-25% yield per annum with CSCO stock (by selling options + dividend)
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.