TECH Dividend
Although TECH has a dividend of 0.08 with an ex-dividend date of Nov 17, you can sell covered calls on Bio-Techne Corp 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):
| Bio-Techne Corp (TECH) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 58.39 |
59.31 |
58.18 |
-1.76 |
2.4M |
130 |
9.3B |
TECH Dividend-Like Income Using Covered Calls
With TECH at 58.18, 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% |
1.75 |
0.5 |
| 5% |
2.91 |
0.8 |
| 10% |
5.82 |
1.6 |
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 TECH Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
60.00 |
2.35 |
44 |
5.3 |
0.69 (1.2%) |
| Nov 21 |
60.00 |
1.00 |
16 |
6.3 |
0.69 (1.2%) |
| 5% Yield On TECH Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
60.00 |
2.35 |
44 |
5.3 |
0.69 (1.2%) |
| Nov 21 |
60.00 |
1.00 |
16 |
6.3 |
0.69 (1.2%) |
| 10% Yield On TECH Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
60.00 |
2.35 |
44 |
5.3 |
0.69 (1.2%) |
| Nov 21 |
60.00 |
1.00 |
16 |
6.3 |
0.69 (1.2%) |
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