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 Thu 4:16 PM ET):
| Tower Semiconductor Ltd. - Ordinary Shares (TSEM) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 31.66 |
35.80 |
35.47 |
+1.45 |
890K |
18 |
3.7B |
TSEM Dividend-Like Income Using Covered Calls
With TSEM at 35.47, 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% |
1.06 |
0.3 |
| 5% |
1.77 |
0.5 |
| 10% |
3.55 |
1.0 |
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 |
| May 16 |
36.00 |
1.95 |
30 |
6.5 |
0.20 (0.6%) |
| Oct 17 |
36.00 |
4.70 |
184 |
2.6 |
0.20 (0.6%) |
| 5% Yield On TSEM Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
36.00 |
1.95 |
30 |
6.5 |
0.20 (0.6%) |
| Oct 17 |
36.00 |
4.70 |
184 |
2.6 |
0.20 (0.6%) |
| 10% Yield On TSEM Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
36.00 |
1.95 |
30 |
6.5 |
0.20 (0.6%) |
| Oct 17 |
36.00 |
4.70 |
184 |
2.6 |
0.20 (0.6%) |
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