16 March, 2023 seen 17With bank stocks beaten down, after SVB bank closure in the US, investors are starting to take notice of the potential…
On December 2, 2020, I sold 23 shares of Bank of America (NYSE:BAC) at $28.94 to purchase 20 shares with AT&T (NYSE:T) at $29.19 per share
We have been holding BAC stock since early 2020, in general, I still like the stock, but it was decided to sell them to have a covered call on T, for which I needed additional 20 shares.
From the money received I bought additional 20 shares of T paying $29.19 per share. T is a stock I'm buying for covered call income. With its quarterly dividend of 0.52 cents per share, this latest buy has a dividend yield of 7.12% and will pay us an additional $8.84every quarter (before tax). Awesome!
As we are now holding 100 shares with T, I immediately sold a covered call on it which generated $18 in 9 days, see: Covered Call on T (NYSE:T) - Potential income return 0.63% in 9 days (25.2% annualized)
T is paying a dividend in the following months: February, May, August, and November
I like T for many reasons - it is the so-called dividend aristocrat stock, the company has raised its dividend for the last 36 years. The company is also paying out a reasonably good dividend (above 6%), last but not least T is a decent stock to sell options on (puts and calls). My goal is to collect 100 shares and start selling covered calls on it.
We are now holding 100 shares of T, which contribute about $176.8 (after tax) yearly to our dividend income portfolio.
Using dollar-cost averaging our average cost per one T share is $29.14
By now T takes 13.08% from our US stock portfolio. and is the second-largest holding after PFE