Dividend stocks for covered calls
25 tracked tickers paid at least 2% a year at the August 3, 2026 snapshot, led by PFE at 6.9%. Writing calls against a dividend payer stacks two income streams on the same 100 shares, and introduces one specific way to lose the shares early that a non-payer does not have.
| Ticker | Price | Dividend yield | Best call annualized | Ex-div in window | ATM IV |
|---|---|---|---|---|---|
| PFEPfizer Inc. | $24.94 | 6.9% | 21.3% | not in this window | 25% |
| MOAltria Group | $68.33 | 6.2% | 21.4% | not in this window | 26% |
| VZVerizon Communications | $47.29 | 5.9% | 19.6% | not in this window | 24% |
| TAT&T Inc. | $23.39 | 4.7% | 18.6% | not in this window | 27% |
| PEPPepsiCo Inc. | $139.51 | 4.1% | 19.7% | yes | 26% |
| FFord Motor Company | $14.66 | 4.1% | 19.2% | yes | 35% |
| NKENike Inc. | $42.26 | 3.9% | 23.6% | not in this window | 40% |
| KMIKinder Morgan | $31.62 | 3.7% | 14.6% | yes | 24% |
| CVXChevron Corporation | $194.93 | 3.6% | 21.9% | yes | 28% |
| XLEEnergy Select Sector SPDR Fund | $59.15 | 3.2% | 17.7% | not in this window | 25% |
| IBMInternational Business Machines | $225.74 | 3.0% | 26.9% | yes | 43% |
| PGProcter and Gamble | $145.12 | 3.0% | 19.2% | not in this window | 23% |
| ABBVAbbVie Inc. | $245.98 | 2.8% | 17.7% | not in this window | 29% |
| HDThe Home Depot | $334.56 | 2.8% | 17.1% | not in this window | 35% |
| NEENextEra Energy | $86.15 | 2.8% | 14.8% | yes | 23% |
| MRKMerck and Co. | $127.40 | 2.6% | 25.5% | yes | 31% |
| XOMExxon Mobil | $155.49 | 2.6% | 23.9% | yes | 31% |
| QCOMQualcomm Inc. | $149.80 | 2.4% | 74.2% | yes | 59% |
| KOThe Coca-Cola Company | $86.97 | 2.4% | 13.2% | yes | 21% |
| SBUXStarbucks Corporation | $105.34 | 2.4% | 21.7% | yes | 30% |
| SLBSLB (Schlumberger) | $49.33 | 2.4% | 20.2% | yes | 35% |
| CCitigroup Inc. | $132.09 | 2.3% | 19.6% | yes | 30% |
| UNHUnitedHealth Group | $416.86 | 2.1% | 19.3% | not in this window | 29% |
| JNJJohnson and Johnson | $252.76 | 2.1% | 18.8% | yes | 24% |
| WFCWells Fargo | $86.77 | 2.1% | 19.3% | yes | 25% |
The early assignment catch
A call holder can exercise at any time, and the day before a stock goes ex-dividend is the one day it is often worth doing. If your short call is in the money and the remaining time value is less than the dividend, the rational move for whoever owns that call is to exercise, take your 100 shares, and collect the payout you were counting on. You keep the premium. You lose the shares and the dividend, and you find out on a Wednesday.
15 of the names above have a confirmed ex-dividend date inside the current window, marked in the table. Those are the ones where this is not theoretical. The defence is unexciting: write strikes far enough out of the money that early exercise is not worth it, and check the ex-div calendar before selling a call that expires just after one.
Two income streams, one asset
The dividend and the call premium both come off the same 100 shares, and both cap you in the same direction. If the stock runs, you are called away and you stop collecting the dividend as well as the upside. Adding the two yields together and calling it a total return works right up to the moment assignment ends both streams at once.