TZOO Dividend Type Payments

Travelzoo dividend

Although TZOO has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Travelzoo 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):

Travelzoo (TZOO)
Bid Ask Last Change Volume P/E Market Cap
21.00 25.00 22.12 +1.33 154K 19 0.2B

TZOO Dividend-Like Income Using Covered Calls

With TZOO at 22.12, 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% 0.66 0.2
5% 1.11 0.3
10% 2.21 0.6

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 TZOO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 17 25.00 0.05 23 0.2 0.00 (0.0%)
Jun 20 25.00 2.35 177 1.3 0.00 (0.0%)
5% Yield On TZOO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 20 25.00 2.35 177 1.3 0.00 (0.0%)
Feb 21 25.00 0.45 58 0.8 0.00 (0.0%)
10% Yield On TZOO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 20 25.00 2.35 177 1.3 0.00 (0.0%)
Feb 21 25.00 0.45 58 0.8 0.00 (0.0%)

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