| Which stock would I buy for Writing Covered Calls - NKE vs SBUX | |||||
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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 | |||||
| NIKE, Inc. | |||||
 | NKE | vs | SBUX |  | |
| Starbucks Corporation | |||||
| Seeing the World Thru my Eyes - the Straight Talk | |||||
| These 2 companies are some of the most recognizable on the planet and many would say ... just stop trading them and own them long term ... and that would be something we should do ... but for selling premium purposes ... which one is a better covered call candidate and how do these 2 companies stack up against one another? | |||||
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| NOTE - AT THE TIME OF THIS POSTING, BOTH COMPANIES STOCK PRICES BELOW | |||||
| NKE | SBUX | ||||
| $127.14 | $83.85 | ||||
| NIKE, Inc. | Starbucks Corporation | ||||
| Just in case you didn't know ... here's some basic company information about what they do. | |||||
| NIKE, Inc., together with its subsidiaries, designs, develops, markets, and sells athletic footwear, apparel, equipment, and accessories worldwide. The company offers NIKE brand products in six categories, including running, NIKE basketball, the Jordan brand, football, training, and sportswear. It also markets products designed for kids, as well as for other athletic and recreational uses, such as American football, baseball, cricket, golf, lacrosse, skateboarding, tennis, volleyball, walking, wrestling, and other outdoor activities; and apparel with licensed college and professional team and league logos NIKE, Inc. in 1971... NIKE, Inc. was founded in 1964 and is headquartered in Beaverton, Oregon. | Starbucks Corporation, together with its subsidiaries, operates as a roaster, marketer, and retailer of specialty coffee worldwide. The company operates in three segments: Americas; International; and Channel Development. Its stores offer coffee and tea beverages, roasted whole bean and ground coffees, single-serve and ready-to-drink beverages, and iced tea; and various food products, such as pastries, breakfast sandwiches, and lunch items. The company also licenses its trademarks through licensed stores ... Starbucks Corporation was founded in 1971 and is based in Seattle, Washington. | ||||
| Yahoo Summary-NKE | Yahoo Summary-SBUX | ||||
| #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 . | |||||
| NIKE, Inc. | Starbucks Corporation | ||||
| S&P 500? | OPTIONS? | DIVIDEND? | S&P 500? | OPTIONS? | DIVIDEND? |
 | | | | | |
| Confirm | Option Chain-NKE | Verify-NKE | Confirm | Option Chain-SBUX | Verify-SBUX |
| Seeing the World Thru my Eyes - the Straight Talk | |||||
| No clear winner here but I do like SBUX dividend ( 1.95%) over NKE (0.84%) | |||||
| #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-NKE | See Support-SBUX | ||||
| Seeing the World Thru my Eyes - the Straight Talk | |||||
| They both have rallied off the March lows with NKE getting a serious bump with today's earnings report ... NKE looks strong ... SBUX isn't chopped liver either but NKE gets the edge here | |||||
| #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. | |||||
| NIKE, Inc. | Starbucks Corporation | ||||
| Zacks | Yahoo Prem | AmBull | Zacks | Yahoo Prem | AmBull |
| HOLD | OVERVALUED | STAY IN CASH | HOLD | OVERVALUED | STAY IN CASH |
| Corfirm Rating - NKE | Yahoo Summary-NKE | Trending? -NKE | Corfirm Rating - SBUX | Yahoo Summary-SBUX | Trending? -SBUX |
| Seeing the World Thru my Eyes - the Straight Talk | |||||
| Surprised that both of these stocks are identical on all (3) of these although I would think with NIKE's earnings blowout this will change ... this new information make NKE the clear winner ... for now | |||||
| #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-NKE | Yahoo Summary-SBUX | ||||
| Seeing the World Thru my Eyes - the Straight Talk | |||||
| Both are profitable but something interesting ... SBUX isn't that far behind in Rev's and Earnings yet NKE has a market cap of $199B where as SBUX is only $93B ... so one would think the value play here is SBUX | |||||
| #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 > | 9/23/2020 | |||
NKE | Current Price | Strike Price | LAST TRADE | 30 day return | Expiration |
| $127.14 | $128.00 | $4.85 | 4.49% | 9/18/2020 | |
| $127.14 | $129.00 | $4.20 | 4.77% | 9/18/2020 | |
| $127.14 | $130.00 | $4.33 | 5.66% | 9/18/2020 | |
| THIS IS NOT THE BID OR MID | |||||
| Check this stocks options here > | https://finance.yahoo.com/quote/NKE/options?p=NKE | ||||
| THESE ARE NOT REAL TIME! CLICK LINK BELOW FOR THAT | |||||
SBUX | Current Price | Strike Price | LAST TRADE | 30 day return | Expiration |
| $83.85 | $84.50 | $3.00 | 4.35% | 9/18/2020 | |
| $83.85 | $85.00 | $2.88 | 4.81% | 9/18/2020 | |
| $83.85 | $85.50 | $2.56 | 5.02% | 9/18/2020 | |
| THIS IS NOT THE BID OR MID | |||||
| Check this stocks options here > | https://finance.yahoo.com/quote/SBUX/options?p=SBUX | ||||
| Seeing the World Thru my Eyes - the Straight Talk | |||||
| No clear winner here ... but WE would be the winners as both of these stocks have options and they pay for a 30 day trade about 4% which is higher than the 3% we try to achieve | |||||
| #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-NKE | Verify-NKE | Alpha Articles Search-SBUX | Verify-SBUX | ||
| MY WINNER IS!!! | |||||
 | NKE | vs | SBUX | | |
| SCORE | SCORE | ||||
| 4 | 4 | ||||
| Seeing the World Thru my Eyes - the Straight Talk Recap! | |||||
| WHAT?! It's a TIE ... yes, when I went thru and gave points for each category both NIKE and SBUX scored 4 each ... this doesn't really surprise me as they are very similar even though they are in 2 very different businesses ... my takeaway is Starbucks seems to be UNDER Valued as compared to NIKE so I would prefer buying shares in them and Writing the OTM CC ... with NIKE's rally today on earnings ... might see it head to another level as they are killing it! ... I like Starbucks over NIKE but they are both Winners here! | |||||
| 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 |
| - | - |  | - | - | |
| Does either of these companies have Earnings Report (next 30 days) | |||||
| NO | - | NO | |||
| ~ | Dec 18, 2020 - Dec 22, 2020 | ~ | Oct 29, 2020 - Oct 29, 2020 | ||
| Verify-NKE | Verify-SBUX | ||||
| Dividend 2% | EX-DATE | Ave Vol | Dividend 2% | EX-DATE | Ave Vol |
| 0.75% | Aug 28, 2020 | 6.396M | 1.90% | Aug 06, 2020 | 8.311M |
| Verify-NKE | Verify-SBUX | ||||
| What story is the chart telling you? | |||||
| StockCarts | Finviz | BarCharts | StockCarts | Finviz | BarCharts |
 |  |  | | ||
| View Chart-NKE | See Support-NKE | View Chart-NKE | View Chart-SBUX | See Support-SBUX | View Chart-SBUX |
| 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 - Yes - at the time of this posting I do have a position in this equity. By posting this I am by no means recommending this equity and am not front running for its performance. I have risked my own money and am accountable for the trade results. | |||||
| 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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