In a continuation of our free report titled "12 Attractive Equity Options for Income Investors," this members-only report contains the top 5. Four of the top five are call options on big-dividend stocks we currently own, and the fifth is a put option on a big-dividend REIT that we follow.
5. Ventas (VTR) Selling Put Options
Ventas is a big-dividend health care REIT that we’d like to own but we are uncomfortable purchasing shares considering its recent strong rally relative to the rest of the market as measured by the S&P 500. As such, we consider selling puts on Ventas to be an attractive option because it pays us a nice premium up front and gives us the potential to own this attractive stock at a low price. And as shown in the following table, we like the November 18th, 2016 puts, and we consider them much more attractive than owning Cisco covered calls.
You can read our recent full write-up on Ventas here:
4. Caterpillar (CAT) Covered Call Options
We own Caterpillar in our Blue Harbinger Income Equity strategy, and we expect to continue owning it for many years to come because of its attractive dividend and continued price appreciation potential. However, the stock has rallied hard off its lows this year and it may be due for a hiatus from its strong rally. For this reason, we believe now is an excellent time to consider selling covered calls on Caterpillar to generate extra income. For example, the following table shows the relative attractiveness of the calls whereby you can pick up an extra 8.4% income in less than two months on the November 18, 2016 calls if they get called. And if they don’t get called then you’re left holding a high quality, big-dividend, long-term value stock.
3. International Business Machine (IBM) Covered Call Options
IBM is another big-dividend stock we own that presents a very attractive income opportunity for those willing to sell covered calls. Specifically, you can pick up an extra 6.4% income in less than two months by selling covered calls (as shown in the following table), and if they don’t get called you’re left owning a high-quality big-dividend stock with lots of price appreciation potential. We believe IBM covered calls are more attractive than Cisco covered calls.
2. Accenture (ACN) Covered Call Options
We own Accenture in our Blue Harbinger Disciplined Growth strategy and we believe now is an attractive time to pick up extra income by writing covered calls on the position. As the following table shows, we can pick up an extra 6.2% income in less than two months if the shares get called on a November 18, 2016 call position as shown in the following chart. And if the shares don’t get called then we’re left owning a high-quality, long-term investment with a decent dividend. We consider Accenture covered calls much more attractive than Cisco covered calls.
You can read our recent full Accenture report here:
1. Phillips 66 (PSX) Covered Call Options
We really like the big-dividend and long-term capital appreciation potential of Phillips 66, but we also recognize they very large premium and income-generation for selling covered calls on the stock as shown in the following table.
Specifically, we can pick up an extra 7.3% income in less than 2 month if the shares get called. And if they don’t get called then we’re left owning this high-quality big-dividend position in our Blue Harbinger Income Equity portfolio.
You can read our recent full write-up on Phillips 66 here: