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.

Today, 9/3011, I BTC 1 BP Jan13 $45.00 Put and STO 1 Jan14 45 Put for a net deposit of $218.47 in my taxable account.  My basis for these BP shares, if put to me, would now be 37.27, excluding trading costs.  These transactions represent a simple return of about 5.86% and an annualized return of about 2.51% on my prior basis, if held to expiration, with 851 days to expiration.

I sold the original Puts in this series when the BP well in the Gulf sank.  My original strike price was $50.  My belief was that the price of BP was being punished much more than need be.  Since the original sale I have now rolled out and down a few times, picking up some additional premium each time.  I believe that this options will expire worthless one because I believe that the price of oil will trend upward in the long term.  I actually thought this option would have expired worthless already but I guess the outlook for the world economy had dampened the outlook for oil stocks in general.

I still think my thesis about the BP price is correct but decided to mitigate my risk a little more and capture some additional cash by rolling the Jan13 Puts out now.  I really would not mind owning some additional BP but if Put to me in this account the purchase would be on margin and I am trying to avoid doing that to any great extent.

S&P currently has a 12 month price target of $58 with a Hold recommendation.  MarketEdge has a price opinion of $39.69 and a Neutral recommendation.  The 12 Yahoo! Analysts have a 12 month price target of $53.70 and a recommendation of 2.0 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 $4,497.84 in dividends in my various accounts for 2011.  My year to date average monthly dividends received is currently $749.64.  The year-to-date dividends currently represent about 25.89% of my average monthly investment cash flow and about 2.11% return on my current basis value.

My YTD dividends are up by $145.36 on a monthly average from last year.  That represents a 24.06% 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 June, I received notice of the following dividends paid in various accounts for a total of $1.025.17.  June has historically been one of the lower months for dividend payouts, at least in my portfolio, however it was a very good month this year.

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.