Best dividend stocks for covered calls
Top dividend stocks for selling covered calls — solid yields, manageable IV, and dividend income on top of premium. Ranked with full reasoning.
Dividend stocks make ideal covered-call underlyings because you collect three income streams from the same shares: the dividend, the call premium, and any capital appreciation up to the strike. The catch is ex-dividend assignment risk. The names below are picked for the balance — steady dividends, liquid option chains, moderate IV (so premiums are meaningful), and dividends low enough relative to time value that early assignment isn't an everyday concern.
The list
-
Healthcare megacap with a 3.2% dividend and low IV. Premiums are modest but the assignment risk is minimal. The textbook 'sleep at night' covered-call name.
-
Procter & Gamble — 2.5% dividend, very low IV regime. Best for accounts that want consistent monthly premium with almost no surprises.
-
Coca-Cola is iconic for buy-and-hold + covered-call. 3% dividend, modest IV, deeply liquid option chain. A starter pick for new income sellers.
-
PepsiCo offers nearly identical dynamics to KO but with slightly higher IV — typically 1-2% more annualized yield in exchange.
-
AT&T is a high-yield (5-6%) telecom name. The chunky dividend means ex-div assignment risk is real — read the dividend article before selling near-the-money calls.
-
Verizon is a 5%+ yielder similar to T. Slightly higher IV makes it a popular choice for income sellers who want premium plus dividend.
-
AbbVie offers a 3.4% dividend with healthcare sector stability. Premiums modest but predictable; good fit for the conservative portion of a wheel portfolio.
-
Merck — 2.6% dividend, low-medium IV. Healthcare positioning makes it less correlated with growth-stock cycles.
Run the math live
The reasoning above is qualitative. For the quantitative side, click any ticker symbol to see live yields, or use the calculators directly:
- Live opportunities — top yields across the full universe
- Covered call calculator
- Cash-secured put calculator
- Strike screener
Related guides
Frequently asked questions
Which is the single best stock from this list?
There's no single answer — it depends on your account size and risk tolerance. For small accounts, focus on the lower-priced names. For larger accounts, the more liquid mega-cap names typically win on consistency. Run the math on each in the linked calculator before committing.
How often is this list updated?
This list reflects analyst judgment as of 2026. The underlying tickers don't change frequently — businesses with deep liquid option chains stay that way. But IV regimes do shift; check the live opportunities dashboard for current premiums.
Where do I see live premiums for these tickers?
Click any ticker symbol to open its per-ticker dashboard with the live option chain ranked by annualized yield. Or use the live opportunities dashboard to compare across all 80+ tracked tickers in real time.