TECH Dividend
Although TECH has a dividend of 0.08 with an ex-dividend date of Feb 13, 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 Wed 4:16 PM ET):
| Bio-Techne Corp (TECH) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 65.76 |
74.00 |
68.67 |
+4.04 |
5.5M |
132 |
10B |
TECH Dividend-Like Income Using Covered Calls
With TECH at 68.67, 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% |
2.06 |
0.6 |
| 5% |
3.43 |
0.9 |
| 10% |
6.87 |
1.9 |
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 |
| Oct 16 |
75.00 |
6.90 |
255 |
2.7 |
1.00 (1.5%) |
| Apr 17 |
75.00 |
1.45 |
73 |
2.0 |
1.00 (1.5%) |
| 5% Yield On TECH Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Oct 16 |
75.00 |
6.90 |
255 |
2.7 |
1.00 (1.5%) |
| Apr 17 |
75.00 |
1.45 |
73 |
2.0 |
1.00 (1.5%) |
| 10% Yield On TECH Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Oct 16 |
75.00 |
6.90 |
255 |
2.7 |
1.00 (1.5%) |
| Apr 17 |
75.00 |
1.45 |
73 |
2.0 |
1.00 (1.5%) |
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