MPWR Dividend

Although MPWR has a dividend of 1.56 with an ex-dividend date of Mar 31, you can sell covered calls on Monolithic Power Systems, Inc. to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):

Monolithic Power Systems, Inc. (MPWR)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
650.00	692.00	661.08	-28.73	726K	78	34B

MPWR Dividend-Like Income Using Covered Calls

With MPWR at 661.08, 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%	19.83	5.4
5%	33.05	9.1
10%	66.11	18.1

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 MPWR Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 16	690.00	51.40	85	58.1	0.00 (0.0%)
Apr 17	690.00	35.40	56	59.6	0.00 (0.0%)

5% Yield On MPWR Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 16	690.00	51.40	85	58.1	0.00 (0.0%)
Apr 17	690.00	35.40	56	59.6	0.00 (0.0%)

10% Yield On MPWR Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 16	690.00	51.40	85	58.1	0.00 (0.0%)
Apr 17	690.00	35.40	56	59.6	0.00 (0.0%)

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Want more examples? MPW Dividend | MPX Dividend