STOCK SHOWDOWN - Writing Covered Calls - DIS vs SBUX

Which stock would I buy for Writing Covered Calls - DIS 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
The Walt Disney Company
	DIS	vs		SBUX
Starbucks Corporation
Disney vs Starbucks ... two of the world's iconic brands. Its safe to say that owning these stocks over the past 10 years has been a fabulous idea ... they've returned so much shareholder value it's ridiculous ... so the real question is ... for Selling Premium traders (ie, Writing Covered Calls for income or cost deduction) which one is best? Below I will offer my option and share with you all the research jump links I use when researching stocks when I'm buying my next great Covered Call candidate.
NOTE - AT THE TIME OF THIS POSTING, BOTH COMPANIES STOCK PRICES BELOW
DIS			SBUX
$104.50			$73.88
The Walt Disney Company			Starbucks Corporation
Just in case you didn't know ... here's some basic company information about what they do.
The Walt Disney Company, together with its subsidiaries, operates as an entertainment company worldwide. The company's Media Networks segment operates domestic cable networks under the Disney, ESPN, Freeform, FX, and National Geographic brands; and television broadcast network under the ABC brand, as well as eight owned domestic television stations. This segment is also involved in the television production and distribution; and operation of National Geographic magazines. Its Parks, Experiences and Products segment operates theme parks and resorts			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, and grocery and foodservice accounts
Yahoo Summary-DIS			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 .
The Walt Disney Company			Starbucks Corporation
S&P 500?	OPTIONS?	DIVIDEND?	S&P 500?	OPTIONS?	DIVIDEND?
Confirm	Option Chain-DIS	Verify-DIS	Confirm	Option Chain-SBUX	Verify-SBUX
These two companies adhere to the golden rules of bother covered call writing and buy and hold investing ... check the dividends for a possible covered call with dividend capture trade to increase your cash on cash profit.
#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-DIS			See Support-SBUX
A company's chart tells a story ... and looking at both of these charts (minus the Mar-2020 virus crash) both stocks were starting to trend lower ... the overall stock market was at or near all time highs and one might suggest the stock market was trading sidelines ... these two stocks were doing just that. Notice the top red lines on both charts ... lower lows which is an indication a stock is losing its bullish momentum.
#2 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.
The Walt Disney Company			Starbucks Corporation
Zacks	Yahoo Prem	AmBull	Zacks	Yahoo Prem	AmBull
	OVERVALUED	STAY LONG		FAIR VALUED	STAY SHORT
Corfirm Rating - DIS	Yahoo Summary-DIS	Trending? -DIS	Corfirm Rating - SBUX	Yahoo Summary-SBUX	Trending? -SBUX
Certainly getting a mixed message here ... if I had to guess these opinions come at different times in the cycle of this Mar-2020 virus crash ... American Bull seems a bit more up to date as its reporting is based on chart indicators (candlestick projections) ... only you can decide how valued a stock is based on your research.
#3 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-DIS			Yahoo Summary-SBUX
I see strong revenue for both companies ... both companies have had its earnings shaved a bit and will really have earnings cut this coming earnings (Mar-2020 virus impact) ... I think the question I ask myself is ... which company can withstand an economic downturn lower ... Disney has 40% of its profits in Theme parks ... hmm ... that isn't good. Starbucks has most all of its profits in brick and mortar stores which have been running suniffically slower ... Disney+ is blowing up and is off setting some of those losses ... Starbucks is reopening in China ... so many things to consider.
#4 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
				POSTED >	4/8/2020
DIS	Current Price	Strike Price	LAST TRADE	30 day return	Expiration
	$104.27	$105.00	$6.95	7.37%	5/8/2020
	$104.27	$106.00	$5.93	7.35%	5/8/2020
	$104.27	$107.00	$6.12	8.49%	5/8/2020
			THIS IS NOT THE BID OR MID
Check this stocks options here >		https://finance.yahoo.com/quote/DIS/options?p=DIS
SBUX	Current Price	Strike Price	LAST TRADE	30 day return	Expiration
	$72.28	$74.00	$1.45	4.39%	5/8/2020
	$72.28	$75.00	$3.18	8.16%	5/9/2020
	$72.28	$76.00	$2.21	8.20%	5/10/2020
			THIS IS NOT THE BID OR MID
Check this stocks options here >		https://finance.yahoo.com/quote/SBUX/options?p=SBUX
They both offer a covered call investor great opportunities for good cash on cash returns ... risk levels are about the same for me so I would easily use both stocks for covered calls.
#4 Hurry Hurry, read all about it! - Company news links
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-DIS		Verify-DIS	Alpha Articles Search-SBUX		Verify-SBUX
MY WINNER IS!!!
	DIS	vs		SBUX
	SCORE		SCORE
	4		5
If I was going to one of these stocks ... I'm buying SBUX. Truth be told ... I would be willing to own BOTH these stocks and write covered calls on them ... right now, I like Starbucks story a bit more than Disney's. With the current virus crisis (Apr-2020) I feel Starbucks will open its doors sooner ... and as people start getting back to work they will get there Coffee CRACK! ... do not mean Disney won't find its way right back to where it was ... remember, this isn't a recommendation and ALWAYS do your due diligence before EVER risking a nickel in the stock market.
Until next time ... may all your Covered Calls be profitable!
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