What is a Covered Call? 5 Best Stocks For Covered Calls

In this article, we discuss what is a covered call and 10 best stocks to buy or covered calls. You can skip our detailed analysis of the covered call strategy and its performance over the years, and go directly to read What is a Covered Call? 5 Best Stocks For Covered Calls. 

5. Oracle Corporation (NYSE:ORCL)

Number of Hedge Fund Holders: 84

Oracle Corporation (NYSE:ORCL) is an American multinational tech company that is known for providing a wide range of software and cloud-based services primarily aimed at businesses and organizations. In fiscal Q1 2023, the company’s revenue came in at $12.4 billion, which showed an 8.7% growth from the same period last year. Its cloud revenue for the quarter came in at $4.6 billion, up 30% from the prior year quarter.

Oracle Corporation (NYSE:ORCL) has raised its dividends for eight years straight. The company offers a quarterly dividend of $0.40 per share and has a dividend yield of 1.47%, as of September 22. It generated $7 billion in operating cash flow in the most recent quarter.

The number of hedge funds tracked by Insider Monkey reported having stakes in Oracle Corporation (NYSE:ORCL) jumped to 84 in Q2 2023, from 67 in the previous quarter. The collective value of these stakes is over $3.4 billion.

4. Johnson & Johnson (NYSE:JNJ)

Number of Hedge Fund Holders: 88

Johnson & Johnson (NYSE:JNJ) is next on our list of the best stocks for covered calls. The multinational pharmaceutical company has a solid history of 61 years of growing its dividends consistently. In the past 10 years, the stock has delivered a return of over 84% to shareholders.

At the end of Q2 2023, 88 hedge funds in Insider Monkey’s database reported having stakes in Johnson & Johnson (NYSE:JNJ), growing from 86 in the previous quarter. The overall value of these stakes is over $4.1 billion. Bridgewater Associates was one of the company’s leading stakeholders in Q2.

3. Apple Inc. (NASDAQ:AAPL)

Number of Hedge Fund Holders: 135

An American multinational tech company, Apple Inc. (NASDAQ:AAPL) generated over $81.8 billion in revenues in the third quarter of 2023. The company also generated an operating cash flow of $26 billion and returned $24 billion to shareholders through dividends and share repurchases. Apple Inc. (NASDAQ:AAPL) also pays dividends and has raised its payouts for 11 consecutive years. In the past five years, the stock has delivered a staggering return of 209.6%.

As of the close of Q2 2023, 135 hedge funds tracked by Insider Monkey reported having stakes in Apple Inc. (NASDAQ:AAPL), up from 131 in the previous quarter. Warren Buffett’s Berkshire Hathaway was the company’s leading stakeholder in Q2.

2. NVIDIA Corporation (NASDAQ:NVDA)

Number of Hedge Fund Holders: 175

NVIDIA Corporation (NASDAQ:NVDA) is a multinational tech company known for its innovations in the fields of graphics processing units (GPUs) and artificial intelligence (AI). The company’s revenue for the quarter showed a 101.6% growth on a year-over-year basis at $13.5 billion. Its Record Data Center revenue came in at $10.32 billion, up 171% from the prior-year period. The stock’s five-year return stood at 492.2%.

NVIDIA Corporation (NASDAQ:NVDA) was a popular buy among hedge funds at the end of Q2 2023, as 175 funds in Insider Monkey’s database owned stakes in the company, up from 132 in the previous quarter. The collective value of these stakes is roughly $26 billion.

1. Microsoft Corporation (NASDAQ:MSFT)

Number of Hedge Fund Holders: 300

Microsoft Corporation (NASDAQ:MSFT) tops our list of the best stocks for covered calls. The multinational tech company declared a 10% hike in its quarterly dividend to $0.75 per share. This marked the company’s 17th consecutive year of dividend growth. Its revenue in fiscal Q4 2023 stood at $56.2 billion, which showed an 8.3% growth from the same period last year.

Of the 910 hedge funds tracked by Insider Monkey at the end of Q2 2023, 300 funds owned stakes in Microsoft Corporation (NASDAQ:MSFT), worth collectively nearly $70 billion.

You can also take a look at 10 Best Ad-tech Stocks To Buy Now and 10 Best Investments During A Recession

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