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 $9.454.95 in dividends in my various accounts for 2011.  My year to date average monthly dividends received is currently $787.91.  The year-to-date dividends currently represent about 28.59% of my average monthly investment cash flow and about 2.14% return on my current basis value.

My YTD dividends are up by $183.64 on a monthly average from last year.  That represents a 30.39% increase to date year over year.  I attribute the increased dividends to a few companies raising their dividends and to my purchasing additional dividend paying stocks.  During October, I received notice of the following dividends paid in various accounts for a total of $832.89.

Please notice that PGF is an ETF and pays dividends monthly.  The annualized dividend yield for PGF is based upon the simple and false assumption that it will pay the same dividend each month for the next 12 months.  The actual annualized dividend yield may be more or less than illustrated here.

The DCIX shares are ones I received as a split off from Diana Shipping (DSX).  I had thought about just selling them but there are so few and the trading cost would chew up so much relative to what I would receive that I decided to keep them, at least for now, and collect the little dividends that they throw off.

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, 11/4/11, I BTC 2 BA Jan13 60 Covered Calls and STO 2 BA Jan14 60 Covered Calls for a net deposit of $328.92.89 in an IRA account.  My basis for these BA shares is now 56.84, excluding dividends received.  This transaction represents a simple return of about 2.81% and an annualized return of about 1.27% on my prior basis.

This is the sixth time in a row that I have rolled out BA Covered Calls but, unlike some previous times, I was not able to roll them up to a higher strike price for a net credit transaction.  Of course, I needed to extend the expiration date by one year because there are no other options available between Jan13 and Jan14.  The reason I did this roll out is because the BA goes ex-dividend next week (11/8/11) and, being well in the money, I was concerned that somebody might want to call it away to realize the gain in the stock price and to capture the dividend.  I wanted to capture some additional option premium just in case and felt like the longer expiration date would help deter execution.

In any event, I prefer to continue to hold onto BA.  It continues to pay a decent dividend at .42 per quarter, which equates to about a 2.55% annual yield at its current market price.  Of course, my basis is below the current market price so my return is a little higher at 2.87% on the last dividends recently received in Sep11.  BA also has a history of raising its dividend.  They raised it almost on an annual basis from 2004 but have remained at the current level since March of 2009.  I have nothing to base it on but I continue to be hopeful that they will raise the dividend again.  Perhaps now that the Dreamliner is finally being delivered they will rethink the dividend payout.

S&P has a 12-month price target of $86.00 and a buy rating on BA.  S&P currently has a poor track record of predicting BA price movement with 0% accuracy.  MarketEdge, with a fair track record (50% accuracy), with a price opinion or $63.89 and has a Long rating on BA.  The 23 Yahoo analysts have a 12-month average price target of $80.91 with a recommendation of 1.9 where 1.0 is a Strong Buy and 5.0 is a Strong Sell.

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 $6,848.47 in dividends in my various accounts for 2011.  My year to date average monthly dividends received is currently $760.94.  The year-to-date dividends currently represent about 27.82% of my average monthly investment cash flow and about 2.12% return on my current basis value.

My YTD dividends are up by $156.67 on a monthly average from last year.  That represents a 25.93% increase to date year over year.  I attribute the increased dividends to a few companies raising their dividends and to my purchasing additional dividend paying stocks.  During August, I received notice of the following dividends paid in various accounts for a total of $730.02.

Please notice that PGF is an ETF and pays dividends monthly.  The annualized dividend yield for PGF is based upon the simple and false assumption that it will pay the same dividend each month for the next 12 months.  The actual annualized dividend yield may be more or less than illustrated here.

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.