NEW YORK ( TheStreet) -- Many companies offer quarterly dividends to shareholders. This can be a great source of income and with each dividend payment received, investors are able to lower their risk in an investment.
The one requirement to receive a dividend from a company is to be a shareholder on the day of record for the dividend. To be a shareholder on the day of record you must buy before the ex-dividend date and keep the shares until at least the ex-dividend date.
My first stock, Medical Properties Trust (MPW) tops this list with a 9% yield.
MPW operates as a real estate investment trust in the U.S. The company was founded in 2003 and is based in Birmingham, Ala.Yield: 9.09%
Dividend Amount: 20 cents
Ex-Dividend Date: June 12, 2012-
Beta: 1.54 Strategy: Buy Medical Properties Trust stock and offer to sell the June $7.50 strike or lower call for 21 cents over the intrinsic value. The option may get exercised early for a gain. In almost all cases, I sell the call option first to ensure the stock option leg is complete. If not, after qualifying for the dividend, I will want to close out the trade near breakeven. Large yield stocks like MPW often attract a lot of interest in dividend capturing, so the option premium may be hard to get. Some brokers offer auto-adjustment to option offering sell prices. The offer for the option short leg is adjusted as the stock price moves, much like a market-maker system. To use an option hedge with MPW will all but require an auto-price adjustment due to low liquidity.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV