Many of the stocks that I own and write Covered Calls upon also pay dividends.  Dividends occur on a regular basis and add significantly to my annual investment income.  Year to date I have received a total of $3,942.65 in dividends in my various accounts for 2010.  My year to date average monthly dividends received is currently $563.24.  These dividends currently represent 26.67% of my monthly investment cash flow and 1.84% return on my current basis value.

During July, I received notice of the following dividends paid in various accounts for a total of $229.00:

I use my basis per share 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.  I calculate my basis per share as my acquisition price less any option premiums received on those shares.  I do not use dividends to reduce my basis.

Today, 6/1/10, I sold 6 ALSK Oct10 10 Covered Calls for a net deposit of $35.40 in two IRA accounts, four in one and two in the other.  My basis for these ALSK shares is now 13.43 and 15.47 respectively, excluding dividends received.

I sold these Covered Calls at a strike price below my basis but it just appears that ALSK cannot quite get back above $10.  The last time it was there was Oct08.  The current option premium is not great but does serve to further reduce my basis a little and provides some small addition to my cash position for further investment.

On a positive note, ALSK pays a good dividend at about 6.4% and 5.5% on my basis.  It is actually about 10.3% on its current market price.  That dividend is possibly a red flag about the company but I am going to continue to hold it for its dividends and the occasional option premiums I collect.  I read the ALSK annual report and the VZ annual report.  ALSK is certainly not as strong as VZ and has some greater competitive challenges, but I saw no compelling reason to dump ALSK at this time

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.  Year to date I have received a total of $2,781.34 in dividends in my various accounts for 2010.  My year to date average monthly dividends received is currently $556.27.

I received notice of the following dividends paid in various IRA accounts for a total of $148.00:

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.