Many of the stocks that I own and write Covered Calls upon also pay dividends. Dividends happen on a regular basis and add significantly to my annual investment income.
Today I was notified that yesterday, 10/21/09, I received the following dividends in two IRA accounts for a total of $129.00:
| Stock | Shares | Total Dividend | Div per Share | Basis per share | % on Basis | Annual % on Basis |
| ALSK | 400 | 86.00 | 0.22 | 13.50 | 1.59% | 6.37% |
| ALSK | 200 | 43.00 | 0.22 | 15.51 | 1.39% | 5.54% |
I use my basis per share, excluding dividends, to determine the simple and annualized percentage return because I feel that it gives me a better representation of the value of the dividends as they relate to my portfolio. My basis may be above or below the market price which causes my return to be lower or higher than published yields for a stock.
My basis per share for these two sets of ALSK increased from the last dividend payout because I rolled Sep09 $7.50 Calls out and up to Apr10 Calls at the $10 strike. The annual return is still quite respectable.