April Income Report

dividendapril17

Time for the monthly numbers! 2017’s divies are marked in green.

Before the European companies drop their yearly dividend bomb real soon, let’s have a look at what April brought in dividends.

Vanguard S&P500 ETF: €9,87
HSBC Holdings PLC: €86,41
Nestlé SA: €19,48

Wal-Mart: $11,53
Altria Group: $5,44


Total april dividend income: €131,40.

Not bad. It’s a good warm-up for May’s dividends. As you can see in the graph above, last year there was a big bump in income for May. I expect it to be even higher this year. I guess it to be a little under €500.

I’m really looking forward to make May’s income report, as a couple of options are set to expire and I’m curious about the movements.

I’m mostly poised about the sold put option on AB Inbev.

Small recap: in the beginning of March I sold 1 put option on AB Inbev, strike 110, expiry date May. I received €1,158 for this action. Due to the recent jump in stock price, the stock is trading near the strike. Actually I do want to be assigned the stocks, so I’m hoping they just trade a little under 110 when the option expires. On the other hand, netting €1,158 in 2,5 months is pretty decent too (almost 12% ROIC).

Yesterday I noticed a very high activity in call option trading on AB Inbev stock. Strike price was $130 (around €118) for September ’17. In case I’m not assigned, I will probably try to sell another put option with a higher strike (preferably 115 or maybe 120 euro), expiring in September.

Now it’s just sitting back and waiting for the end of May. The French elections might still be a bummer but we’ll see how it evolves this weekend.

 

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11 thoughts on “April Income Report

  1. Stalflare

    Ciao WDYR,
    I am studying your PF, there are some interesting names that I never considered… But coming to THIS article it struck me the usage of put options that you do… You sell ITM puts? Are they covered or naked? It’s an interesting way of working with them, I never thought of it to be honest, of course you must be bullish on the stock!
    Ciao and thanks for sharing!
    Stal

    Like

    • When Do You Retire?

      Hey Stal,
      Depending on the stock, I do indeed sell ITM puts. I do have the cash available to buy them on expiration date such as AB Inbev. In March they were trading around €102 and I wanted to buy 100 of them. However, when I saw the option premiums (for strike 110), I decided to go down this route. The premium was a whopping €1,160 in total, meaning I would actually pay €11,000 – €1,160 = €9,840. This was a discount of €360 on the current price, not negligible in my opinion. Indeed I was bullish because I thought most negative news was calculated in the price. Or I would get the stocks at a nice discount, or I get to keep a nice €1,160 premium in less than 10 weeks. Either way I’m happy.

      I sometimes sell OTM puts too but then the cash is not always available. Of course then the risk should be very low (to keep using AB Inbev as an example, let’s say a strike of 85) and the reward acceptable.

      Right now I’m betting on General Mills with options. I wrote one ITM (67,5) and one OTM (55) for October. I think if you want a good dividend stock at a fair price or a decent premium, it might be worth looking at. They don’t have a very volatile history.

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      • Stalflare

        Ciao WDYR, Very interesting strategy… Indeed at that price the option was a great one! I need to start looking at the ITM puts as well, although I try to use options to rise capital and not to average down costs, but in the end it’s just the way you account for things I guess…
        Nice one though! GIS is on my radar too, but the yield is quite low… 😛
        ciao ciao
        Stal

        Liked by 1 persoon

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