| Which stock would I buy for Writing Covered Calls - ABBV vs BMY | |||||
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| DISCLAIMER: This stock comparison is 100% for entertainment. I'm not recommending these stocks as a purchase. The research jump links in this blog post are ones that I use to start my stock investing research. Always do your own due diligence and never risk more money then you are willing to lose. Think of it like this blog post as seeing the world thru my eyes. | |||||
| COVERED CALL SHOWDOWN! - WHICH STOCK WOULD I PURCHASE TO WRITE A COVERED CALL | |||||
| AbbVie Inc. | |||||
 | ABBV | vs | BMY |  | |
| Bristol-Myers Squibb Company | |||||
| Seeing the World Thru my Eyes - the Straight Talk | |||||
| Were in an interesting time where the virus has taken the focus off Big Pharma and its seemly high drug costs ... and in fact if I was a betting man I would even suggest that coming out of this virus situation the heat that has been placed on them will not be as HOT ... reason being Big Pharma for the most part, as best we can tell has stepped up the efforts to find drugs and testing kit solutions for the virus and that has cooled the relationship with politicians for now and I think that will be the trend leading into and thru 2021 ... and if one were to come up with a vaccine during Trump's Presidency ... I'm guessing that will play serious favor and ALL Big Pharma will be let off the hook for criticism ... so I asked myself, let's break this down and compare two companies that have recently completed mergers (for growth) and ask the question - near term - which company is best for Writing Covered Calls and sprinkle in some bigger picture investing observations in this Stock Showdown! | |||||
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| NOTE - AT THE TIME OF THIS POSTING, BOTH COMPANIES STOCK PRICES BELOW | |||||
| ABBV | BMY | ||||
| $90.85 | $61.29 | ||||
| AbbVie Inc. | Bristol-Myers Squibb Company | ||||
| Just in case you didn't know ... here's some basic company information about what they do. | |||||
| AbbVie Inc., a research-based biopharmaceutical company, develops and markets pharmaceutical products in the United States, Japan, Germany, Canada, France, Spain, Italy, the Netherlands, the United Kingdom, Brazil, and internationally. The company offers HUMIRA, a biologic therapy administered as an injection for autoimmune and intestinal diseases; SKYRIZI to treat moderate to severe plaque psoriasis in adults; RINVOQ, a JAK inhibitor for the treatment of moderate to severe active rheumatoid arthritis in adult patients; IMBRUVICA to treat adult patients with chronic lymphocytic leukemia ... The company was incorporated in 2012 and is based in North Chicago, Illinois. | Bristol-Myers Squibb Company discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. It offers products in the following therapeutic classes: hematology, oncology, cardiovascular, and immunology. The company's products include Opdivo, a biological product for anti-cancer indications; Eliquis, an oral inhibitor targeted at stroke prevention in adult patients ... The company was formerly known as Bristol-Myers Company and changed its name to Bristol-Myers Squibb Company in 1989. Bristol-Myers Squibb Company was founded in 1887 and is headquartered in New York, New York. | ||||
| Yahoo Summary-ABBV | Yahoo Summary-BMY | ||||
| #1 - The Golden Rules of Covered Call Writing! | |||||
| The Golden Rules of Covered Call Writing are subjective ... the basic idea is to avoid as much risk as possible when determining a new stock purchase for a Covered Call Write ... we can not avoid risk entirely but using certain rules or guidelines will help use reduce that risk during the timeframe we use the stock for selling premium. I've included the most popular rules or guidelines below which include: avoid a company's earnings report, is the company apart of the S&P 500 or Dow Jones?. Does the company have a dividend? Does the company have same store sales reports? Do you want to own the stock? > This list isn't the end all be all list but a starter list for your research and lowering your risk ... but again, we can not avoid risk . | |||||
| AbbVie Inc. | Bristol-Myers Squibb Company | ||||
| S&P 500? | OPTIONS? | DIVIDEND? | S&P 500? | OPTIONS? | DIVIDEND? |
 | | | | | |
| Confirm | Option Chain-ABBV | Verify-ABBV | Confirm | Option Chain-BMY | Verify-BMY |
| Seeing the World Thru my Eyes - the Straight Talk | |||||
| Because both offer pretty much the same risk ... I have to ask myself which company has a better growth story ... and for my money I think BMY with its merger with Celgene has more growth in its future so I'd lean BMY here but do understand that both these companies have a strong growth story in my opinion ... both are S&P 500 type companies, have dividends and have good option volume/action. I like both (remember, we buy a stock thinking we might have to hold it if the trade goes bad ... so I wouldn't mind holding either. | |||||
| #2 - What story is the chart telling us? | |||||
| When buying stocks to Write Covered Calls the prime objective is for the stock to trade sideways to higher ... selling premium traders will purchase a stock and sell the Out of the Money strike to collect both the premium and the stock appreciation. I always like to look at a chart and ask the question "what story is this chart telling me?" ... if its trending higher, this is good. If its trending lower, well, I really need to do my research if I'm going to invest in a company that its stock is trending lower. | |||||
| See Support-ABBV | See Support-BMY | ||||
| Seeing the World Thru my Eyes - the Straight Talk | |||||
| Wow! The charts are so similar ... both have recovered from the March 2020 virus selloff ... now they seem to have settled down ... I suspect outside of news and events ... they trade with the overall markets. | |||||
| #3 - What are "THEY" saying? | |||||
| I'm not an expert when it comes to whether a stock is undervalued or overvalued or if its a Buy or a Sell ... so I use some great websites to 'paint a picture' for me. Some will have a stock as a Buy and another will have it as a Sell ... so I usually have 3 or 4 different sources to help me. | |||||
| AbbVie Inc. | Bristol-Myers Squibb Company | ||||
| Zacks | Yahoo Prem | AmBull | Zacks | Yahoo Prem | AmBull |
| BUY | FAIRVALUED | STAY IN CASH | BUY | FAIR VALUED | STAY LONG |
| Corfirm Rating - ABBV | Yahoo Summary-ABBV | Trending? -ABBV | Corfirm Rating - BMY | Yahoo Summary-BMY | Trending? -BMY |
| Seeing the World Thru my Eyes - the Straight Talk | |||||
| This doesn't surprise me ... both are considered FAIRVALUED on Yahoo Prem ... even Zacks agrees and has both at BUY ... ABBV is a stronger Zacks BUY but I feel a BUY rec is a BUY rec anyway you slice it. Both stocks are sitting good right now ... now the candlestick charts from American Bull has BMY staying long in the current stock purchase where they have ABBV as a stay in cash ... if both stocks trend higher Im sure they will both be in a long position. | |||||
| #4 - SHOW ME THE MONEY! | |||||
| Another great visual when quickly trying to determine if this/these are companies we want to own ... remember, we have to own these companies and if the picture isn't telling us a clear picture of a companies prospects then I have to make sure I really do my homework. | |||||
 | |||||
| Yahoo Summary-ABBV | Yahoo Summary-BMY | ||||
| Seeing the World Thru my Eyes - the Straight Talk | |||||
| So SO close here ... ABBV is the larger company and the revenues and earnings play that out ... both have similar up trending numbers ... ABBV acquisition of Allergan might have a positive effect on the overall earnings picture ... BMY is just trending steady eddie and I think the Celgene merger will help add growth. They look similar but I have my favorite on this one. | |||||
| #5 - What kind of Covered Call profits can we make? | |||||
| Giving someone the right but not the obligation to take your shares can be very profitable if done correctly ... typically most Covered Call writers will try to make 3% Cash on Cash profit in a 30 day period. Mastering this skill of selling premium can increase your annual returns vs a buy and hold investment strategy. Below is a (1) deviation Out of the Money Covered Call that one might do if they sell premium. | |||||
| Looking at a 30 day window using (3) deviationS Out of the Money | |||||
| THESE ARE NOT REAL TIME! CLICK LINK BELOW FOR THAT | POSTED > | 4/16/2020 | |||
ABBV
| Current Price | Strike Price | LAST TRADE | 30 day return | Expiration |
| $90.85 | $92.50 | $2.34 | 4.39% | 5/15/2020 | |
| $90.85 | $95.00 | $1.39 | 6.10% | 5/15/2020 | |
| $90.85 | $97.50 | $0.79 | 8.19% | 5/15/2020 | |
| THIS IS NOT THE BID OR MID | |||||
| Check this stocks options here > | https://finance.yahoo.com/quote/ABBV/options?p=ABBV | ||||
| THESE ARE NOT REAL TIME! CLICK LINK BELOW FOR THAT | |||||
BMY
| Current Price | Strike Price | LAST TRADE | 30 day return | Expiration |
| $61.29 | $62.50 | $1.54 | 4.49% | 5/15/2020 | |
| $61.29 | $65.00 | $0.61 | 7.05% | 5/15/2020 | |
| $61.29 | $67.50 | $0.20 | 10.46% | 5/15/2020 | |
| THIS IS NOT THE BID OR MID | |||||
| Check this stocks options here > | https://finance.yahoo.com/quote/BMY/options?p=BMY | ||||
| Seeing the World Thru my Eyes - the Straight Talk | |||||
| Both have good options and in fact I have played both for 30 day covered calls as well as CCW+DIV Capture covered calls because they both pay good quarterly dividends. ABBV's dividend is larger ... both are div's that I could write home about. | |||||
| #7 - "HURRY HURRY, READ ALL ABOUT IT!" | |||||
| The internet has so many resources for good information on companies ... whether its news, events or just some blogger with a great perspective on a company's prospects ... I love just glancing at the news feeds to get a feel for what's going on with a company I'm researching ... below are some helpful jump links I use. | |||||
| Seeking Alpha | DivChannel | Seeking Alpha | DivChannel | ||
| Alpha Articles Search-ABBV | Verify-ABBV | Alpha Articles Search-BMY | Verify-BMY | ||
| MY WINNER IS!!! | |||||
| ABBV | vs | BMY |  | ||
| SCORE | SCORE | ||||
| 5 | 6 | ||||
| Seeing the World Thru my Eyes - the Straight Talk Recap! | |||||
| Bristol Myers is my winner for this Stock Showndown - mainly because I like the BMY growth story more then ABBV's ... but that doesn't mean ABBV is chop liver ... they have a strong balance sheet, products and seemly future with its merger with Allergan ... BMY's story is more compelling and in fact is my #1 Buy and Hold stock (recent blog post) and hasn't disappointed since making that proclaimion ... if you believe the future is bright for both companies, they are both buy and hold canidates and can be used for nice 3% covered calls for income. | |||||
| The BONUS Deeper Dive! | |||||
| #8 - More number that help us Up Our Game! | |||||
| I'm not an expert when it comes to whether a stock is undervalued or overvalued or if its a Buy or a Sell ... so I use some great websites to 'paint a picture' for me. Some will have a stock as a Buy and another will have it as a Sell ... so I usually have 3 or 4 different sources to help me. | |||||
| FFTY | ST50 | S&P 500 | FFTY | ST50 | S&P 500 |
| YES | YES | ||||
| Does either of these companies have Earnings Report (next 30 days) | |||||
| April 16, 2020 | > | May 16, 2020 | |||
| ~ | Jul 24, 2020 - Jul 28, 2020 | ~ | Jul 23, 2020 - Jul 27, 2020 | ||
| Verify-ABBV | Verify-BMY | ||||
| Dividend 2% | EX-DATE | Ave Vol | Dividend 2% | EX-DATE | Ave Vol |
| 4.83% | Apr 14, 2020 | 13.561M | 2.81% | Apr 02, 2020 | 17.42M |
| Verify-ABBV | Verify-BMY | ||||
| What story is the chart telling you? | |||||
| StockCarts | Finviz | BarCharts | StockCarts | Finviz | BarCharts |
 |  |  | | ||
| View Chart-ABBV | See Support-ABBV | View Chart-ABBV | View Chart-BMY | See Support-BMY | View Chart-BMY |
| I hope you enjoyed this Covered Call Stock Showdown blog ... as always you know this is for entertainment and before EVER investing a nickel of your hard earned money you need to do your research or what they call due diligence ... no, nada, zip zilcho stock recommendations were made here ... this ALL should be your STARTING POINT for determining if either of these companies meet your stock investing risk profile. Good luck everyone! | |||||
| Disclaimer - No - at the time of this posting I do not have a position in this equity. I will not take a position in this equity for 3 days of this equity as to not front run for this equity. | |||||
| Remember, the content of this site is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Please read the full disclaimer posted below and visit cptdashboard.com for my privacy policy. | |||||
| Trading stocks and options have risk. Required reading prior to placing money at risk with options is the ODD which is posted below. "The Characteristics & Risks of Standardized Options" Prior to buying or selling an option, investors must read a copy of the Characteristics & Risks of Standardized Options, also known as the options disclosure document (ODD). It explains the characteristics and risks of exchange traded options. | |||||
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| Image credits - stockcharts.com | barchart.com | foolcdn.com | yahoo.com | earningswhispers.com | |||||
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