BBT - New Position

A new position was established today on BBT. The following is the trade information, including IB commissions:

Note: Actual prices were update on 1/20. The original prices were incorrect (I made a typo on my spreadsheet which I just caught). The position is now slightly more profitable with the correct prices.

07-Jan-08 - Initial Stock Position - BTO 100 BBT @ 28.03
07-Jan-08 - Initial Call Option - STO 1 Feb08 27.50 Call @ 1.63
01-Feb-08 - DIV 100 Dividend @ 0.46

Summary without the dividend:

Stock Investment: $2,803.00
Income Generated: $163.00
Percent Income Generated: 5.82%
Annualized Income Generated: 54.42%
Net Profit If Called: $110.00
Percent Return If Called: 3.92%
Annualized Return If Called: 36.73%
Days to Expiration: 39 days

Summary with the dividend:

Stock Investment: $2,803.00
Income Generated: $209.00
Percent Income Generated: 7.46%
Annualized Income Generated: 69.78%
Net Profit If Called: $156.00
Percent Return If Called: 5.57%
Annualized Return If Called: 52.09%
Days to Expiration: 39 days

BBT was recommended by Morningstar DividendInvestor. I'm using a dividend capture strategy since BBT goes ex-dividend on 1/9/08 and pays a 0.46/share dividend on 2/1/08. The annual dividend yield at my cost of $28.12 is 6.54% ((0.46*4)/28.12). This is above the 5 year average dividend yield of 3.30%, which is an indication that the stock is undervalued. The dividend information for BBT was obtained from DividendInvestor.com.