MMM - New Position

A new dividend position was established today on 3M Company (MMM). The following is the trade information, including IB commissions:

01-Jul-09 - Initial Stock Position - BTO 100 MMM @ 60.84
01-Jul-09 - Initial Call Option - STO 1 Aug09 60.00 Call @ 2.90
11-Sep-09 - Dividend Received - DIV 100 Dividend @ 0.51

3M Company is a fundamentally solid wide moat company, with 10 consecutive years of positive cash flow, and 50 consecutive years of dividend increases. They should declared a quarterly dividend of $0.51, with ex-dividend date approximately on 8/10, payable approximately on 9/11.

I analyzed doing either a covered call (CC) or a cash secured put (CSP) and decided to do the CC trade to capture the dividend, since it had a slightly better profit than the CSP.

Summary without the dividend if called early the day before Ex-Dividend date:

Stock Investment: $6,084.00
Income Generated: $290.00
Percent Income Generated: 4.77%
Annualized Income Generated: 43.50%
Net Profit If Called: $206.00
Percent Return If Called: 3.39%
Annualized Return If Called: 30.90%
Days Held to Ex-Dividend Date: 40 days

Summary with the dividend if called at option expiration:

Stock Investment: $6,084.00
Income Generated: $341.00
Percent Income Generated: 5.60%
Annualized Income Generated: 40.11%
Net Profit If Called: $257.00
Percent Return If Called: 4.22%
Annualized Return If Called: 30.23%
Days Held to Expiration: 51 days

Dividend Information:

Ex-Dividend Date: 08/10/09 approx.
Dividend Pay Date: 09/11/09 approx.
Dividend Rate: $2.04 ($0.51/quarter)
Dividend Yield on Cost: 3.53%