MGIC Dividend

Although MGIC has a dividend of 0.24 with an ex-dividend date of Dec 23, you can sell covered calls on Magic Software Enterprises Ltd. - Ordinary Shares to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 2:15 PM ET):

Magic Software Enterprises Ltd. - Ordinary Shares (MGIC)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
11.02	11.11	11.07	+0.06	18K	16	0.5B

MGIC Dividend-Like Income Using Covered Calls

With MGIC at 11.07, here's a table showing how big the annual "dividend" (i.e. total annual call premium received) would need to be to attain 3%, 5%, and 10% annual yields. Also shown is the equivalent number of cents/day necessary to achieve each yield:

Annual Yield	Annual Premium	Cents/Day
3%	0.33	0.1
5%	0.55	0.2
10%	1.11	0.3

So now we need to find out of the money covered calls that pay at least the prescribed cents/day amount of time premium. That will generate income and, because they are out of the money, leave room for some upside potential on the stock. Here are some examples:

3% Yield On MGIC Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 16	12.50	0.40	179	0.2	1.39 (12.6%)

5% Yield On MGIC Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 16	12.50	0.40	179	0.2	1.39 (12.6%)

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