As an investor, I’m a sucker for two thing: value and income.

The nice thing about Canada’s stock market is that there are plenty of stocks that satisfy both criteria. Anything related to Alberta is beaten up, meaning there are plenty of opportunities for investors to buy high-quality companies that are suffering from temporary headaches. Oil will eventually come back, and Alberta’s economy will come along with it.

But there are other value stocks out there that don’t pay dividends. One of the most popular is BlackBerry Ltd. (TSX:BB)(NASDAQ:BBRY), the beleaguered maker of smartphones.

There are plenty of reasons why investors might think BlackBerry is undervalued. The company has a stellar balance sheet with nearly US$2.3 billion in cash. The new Priv handset seems to be gaining traction with users, and plans are for the company to release a second Android-powered device. The software division is also posting good results. Make no mistake, software will play an important role if BlackBerry returns to anything resembling its former glory.

There’s seemingly only one problem with BlackBerry, which is the lack of dividend. I’ve invested in a lot of deep value situations over the years, and I know turnarounds often take years to materialize. Getting paid at least a modest dividend while you wait is a huge bonus.

BlackBerry could easily pay one, too. The company is comfortably free cash flow positive, and it has billions in the bank. And paying a dividend will attract a whole new set of investors. It’ll also send a message to the market that BlackBerry is no longer worried about its survival. Companies on the brink cut their dividends. They don’t initiate new ones.

Investors shouldn’t hold their breath waiting for BlackBerry to start paying a dividend. Instead, here’s how they can generate their own income stream from the company.

Sell covered calls

A call gives you the right to buy a stock at a certain price. If you sell a call, you’re transferring that right to somebody else, while getting the value of the option in cash, today. Selling a call on a stock you already own is called a covered call.

Let me explain it using a real-life example. I bought BlackBerry shares at approximately $13 each a few years ago. If I sold the Feb 19, 2016 call at a $15 per share strike price, I’d get $24 in premiums for every 100 shares I owned. Based on the current share price on the TSX, it works out to a “yield” of a little less than 2%, less any commission paid on the trade. If you do that four times a year, you’re generating a yield of nearly 8% annually.

Come February, one of two things can happen to BlackBerry’s share price. Either it will be below $15, or it will be equal to or above $15. If it’s below $15, the buyer of the calls I sold will let the options expire as worthless. Why spend $15 to buy the shares when the open market sells them cheaper?

The other outcome is that BlackBerry rallies above $15 per share. In that case I’d be obligated to sell my shares to the person who bought the option I sold. I’d be out whatever the difference is between $15 and the current price. Thus, the covered call strategy limits my potential upside on the stock. If a competitor makes an offer to acquire BlackBerry at $20 per share, as a covered call writer I’d be pretty upset.

But it’s not the end of the world. Even stocks like BlackBerry don’t spike that much very often. And if it does, I’d still make a profit of $2 per share, plus the $0.24 per share collected in premiums. That’s still a total return of about 17% on an original $13 investment.

Covered calls are a great way for investors to generate a little extra income from stocks that don’t pay dividends. You’ll limit your upside a bit, but worst-case scenario you can just go and buy the stock back if you’re still bullish on it. BlackBerry is a great stock to sell covered calls with because the majority of the buyers looking at BlackBerry calls are doing so on speculation, not to generate income.

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Fool contributor Nelson Smith owns shares of BlackBerry.