Established Covered Call Position in Philip Morris International Inc.

This morning, a Covered Call position was established in Philip Morris International Inc. (ticker PM) when the Covered Calls Advisor's buy/write limit order at a net debit price of $153.40 was transacted.  One hundred shares were purchased at $158.53 and one January 9th, 2025 Call option was sold at $5.13 at the $155.00 strike price.  The potential time value profit was $1.60 per share = [$155.00 strike price - ($158.53 stock purchase price - $5.13 Call option price)].  A moderately in-the-money Covered Call position was established with the probability that the position would be assigned on the options expiration date was 67.6%.  As is my preference, there is no earnings report prior to the options expiration date.  Philip Morris goes ex-dividend on December 26th, 2025 at $1.47 per share (a 3.7% annual dividend yield).  This quarterly dividend amount is +8.9% above that for the same quarter last year.  

Analysts' current average target price for Philip Morris is $181.17 (+14.3% above today's purchase price).  Philip Morris did not appear today on any of my primary stock screeners.  However, LSEG rates it as a 9 for both their Average Rating and their Optimized Rating (on a scale of 1 to 10).

As detailed below, two potential return-on-investment results are:

•  +1.0% absolute return (equivalent to +47.4% annualized return-on-investment for the next 8 days) if the stock is assigned early (last trading day prior to the December 26th, 2025 ex-dividend date); OR 

• +2.0% absolute return (equivalent to +33.1% annualized return-on-investment over the next 22 days) if the stock is assigned on the January 9th, 2026 options expiration date.

Philip Morris International Inc. (PM) -- New Covered Call Position
The simultaneous net debit buy/write transaction was:
12/18/2025 Bought 100 Philip Morris shares @ $158.53.
12/18/2025 Sold 1 Philip Morris 1/9/2026 $155.00 Call option @ $5.13 per share.
Note: the Implied Volatility of this Call option was 19.2 when this position was established.
12/26/2025 Upcoming quarterly ex-dividend of $1.47 per share.

Two possible overall performance results (including commissions) for this Philip Morris Covered Call position are as follows:
Covered Calls Cost Basis: $15,340.67

= ($158.53 - $5.13) * 100 shares + $.67 commission

Net Profit Components:
(a) Options Income: +$512.33
= ($5.13 * 100 shares) - $.67 commission
(b) Dividend Income (If options exercised early on Dec. 24th, 2025, the last trading day prior to the Dec. 26th ex-div date): +$0.00; or
(b) Dividend Income (If Philip Morris stock assigned on the January 9th, 2026 options expiration -- so the dividend is captured): +$147.00
= ($1.47 dividend per share x 100 shares)

(c) Capital Appreciation (If Philip Morris Call option assigned early on Dec. 26th, 2025): -$353.00
+($155.00 strike price - $158.53 stock purchase price) * 100 shares; or
(c) Capital Appreciation (If shares assigned at $155.00 strike price at options expiration): -$353.00
+($155.00 - $158.53) * 100 shares

1. Total Net Profit (If options exercised early): +$159.33

= (+$512.33 option income + $0.00 dividend income - $353.00 capital appreciation); or

2. Total Net Profit (If Philip Morris shares assigned at $155.00 on the Jan. 9th, 2026 expiration date): +$306.33

= (+$519.33 option income + $147.00 dividend income - $353.00 capital appreciation)

1. Absolute Return-on-Investment [If option exercised on the last trading day prior to the Dec. 26th, 2025 ex-dividend date]: +1.0%

= +$159.33/$15,340.67

Annualized Return-on-Investment (If option exercised early): +47.4%

= (+$159.33/$15,340.67) * (365/8 days); or

2. Absolute Return-on-Investment (If Philip Morris shares assigned on the January 9th, 2026 options expiration date): +2.0%

= +$306.33/$15,340.67

Annualized Return-on-Investment (If Philip Morris shares assigned at $155.00 at the January 9th, 2026 options expiration date): +33.1%

= (+$306.33/$15,340.67) * (365/22 days)

Either outcome provides a satisfactory return-on-investment result for this Philip Morris Covered Call investment.  These returns will be achieved as long as the stock is above the $155.00 strike price at assignment.  However, if the stock declines below the strike price, the breakeven price of $151.93 = ($158.53 stock price - $5.13 Call option price - $1.47 dividend) provides 4.2% downside protection below today's stock purchase price.

At least eight of the nine metrics used in the Covered Calls Advisor's Dividend Capture Strategy spreadsheet (see below) must be 'YES' prior to establishing a new Covered Calls position using the Covered Calls Advisor's Dividend Capture strategy.  As shown in the chart below, all nine criteria are achieved for this Philip Morris International Inc. Covered Call position.