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 $3,898.29 in dividends in my various accounts.  My year to date average monthly dividends received is currently $974.57.  The year-to-date dividends currently represent about 32.69% of my average monthly investment cash flow and about 2.57% return on my current basis value.

My YTD dividends are up by $186.66 on a monthly average from last year.  That represents a 23.69% 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 April, I received notice of the following dividends paid in various accounts for a total of $1,195.28.

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.

ANH, MFA and NLY are mortgage REITs that make their money on interest rate spreads.  Their current high annualized dividend yields on my basis are probably at risk when the Fed begins to raise its discount rates.  As of this writing, my current basis, excluding dividends, for some of these stocks is now below their current market price, which increases my yield on those stocks.  From time to time, I attempt to sell Covered Calls on these stocks to reduce my basis, which, to some extent, will help mitigate any possible future reduction in their dividend payouts.  I find myself just holding some of these stocks while I wait for their price to rise to a point that I am comfortable selling new Covered Calls.  If I do not sell new Covered Calls I am content to capture the nice dividend for an indefinite period.  Notably, PGF, NLY, ANH and MFA fall into this category.

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.

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 $1,096.51 in dividends in my various accounts for 2012.  My year to date average monthly dividends received is currently $1,096.51.  The year-to-date dividends currently represent about 27.41% of my average monthly investment cash flow and about 2.98% return on my current basis value.

My YTD dividends are up by $308.60 on a monthly average from last year.  That represents a 39.17% 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 January, I received notice of the following dividends paid in various accounts for a total of $1.096.51.

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.

ANH, MFA and NLY are mortgage REITs that make their money on interest rate spreads.  Their current high annualized dividend yields on my basis are probably at risk when the Fed begins to raise its discount rates.  As of this writing, my current basis, excluding dividends, for some of these stocks is now below their current market price, which increases my yield on those stocks.  From time to time, I attempt to sell Covered Calls on these stocks to reduce my basis, which, to some extent, will help mitigate any possible future reduction in their dividend payouts.  I find myself just holding some of these stocks while I wait for their price to rise to a point that I am comfortable selling new Covered Calls.  If I do not sell new Covered Calls I am content to capture the nice dividend for an indefinite period.  Notably, PGF, NLY, ANH and MFA fall into this category.

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, 12/1511, I BTC 3 MO Jan12 $26 Covered Calls and STO 2 Jan14 $27 Covered Calls, 2 in one account and 1 in another account.  Both sets of transactions were in IRA accounts and created a total net deposit of $5.45.  My basis for these MO shares is now $22.80 and $24.07 respectively.

These transactions yielded negligible option returns but did allow me to increase the strike price by one dollar.  There are no Jan14 $26 strike prices available and I did not want to sell the $25 strike price.  MO goes ex-dividend next week on 12/22/11 and I was in the money by more than $3 for my Jan12 Covered Calls so I expected that I might be called away by somebody wanting to capture the dividend.  I am now in the money by a little more than $2 so I might still be called away for the dividend but if I am, I will now have captured an additional $1 per share with the new strike price.  In addition, it has been my experience that those options that are farther out seem to be assigned less often.  I still make money on the shares if I am called so I would not get hurt either way.

Speaking of dividends, MO pays a pretty good dividend at 41 cents per quarter for an annualized return of about 5.63% at the current market price and about 7.19% and 6.81% respectively on my current basis.

I consider MO a part of my long term core holdings and will continue to accumulate it or sell Puts on it when I can do so below my average basis.

The 8 Yahoo Analysts currently have a 12-month price target of $29.00 and a recommendation of 2.5, down from 2.3 last week, where 1.0 is a Strong Buy and 5.0 is a Strong Sell.