Top Dow Dividend Stocks: Dividends vs. Options

The Dogs of the Dow strategy focuses on Dow dividend paying stocks with the highest dividend yields. Currently, the 3 highest dividend paying stocks in the Dow are AT&T (T), Verizon (VZ), and Merck (MRK). This week we'll compare current covered calls and cash secured put options to the dividend payouts for these stocks, all of whom are listed in our "High Dividend Stocks by Sector" tables. Here's how these 3 stocks have performed: Like most other Healthcare stocks, Merck has lagged the market over the last year. In 2011 it has also lagged the Healthcare sector, which is up nearly 10%. AT&T and Verizon have both surged over the past year, partially due to the smartphone revolution. AT&T benefited greatly from its exclusive sales arrangement with Apple, (AAPL), for selling the IPhone, an exclusivity which was lost, when Apple also granted Verizon selling rights in 2011. Selected Financial Metrics:... Read more