TSEM Dividend Type Payments
Although TSEM has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Tower Semiconductor 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 Wed 3:35 PM ET):
| Tower Semiconductor Ltd. - Ordinary Shares (TSEM) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 51.30 |
51.38 |
51.31 |
-1.14 |
879K |
28 |
5.7B |
TSEM Dividend-Like Income Using Covered Calls
With TSEM at 51.31, 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% |
1.54 |
0.4 |
| 5% |
2.57 |
0.7 |
| 10% |
5.13 |
1.4 |
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 TSEM Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 17 |
55.00 |
0.80 |
31 |
2.6 |
3.62 (7.1%) |
| Apr 17 |
55.00 |
3.30 |
121 |
2.7 |
3.62 (7.1%) |
| 5% Yield On TSEM Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 17 |
55.00 |
0.80 |
31 |
2.6 |
3.62 (7.1%) |
| Apr 17 |
55.00 |
3.30 |
121 |
2.7 |
3.62 (7.1%) |
| 10% Yield On TSEM Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 17 |
55.00 |
0.80 |
31 |
2.6 |
3.62 (7.1%) |
| Apr 17 |
55.00 |
3.30 |
121 |
2.7 |
3.62 (7.1%) |
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