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 Fri 4:16 PM ET):
| Tower Semiconductor Ltd. - Ordinary Shares (TSEM) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 119.00 |
123.00 |
118.94 |
-10.00 |
2.3M |
74 |
14B |
TSEM Dividend-Like Income Using Covered Calls
With TSEM at 118.94, 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% |
3.57 |
1.0 |
| 5% |
5.95 |
1.6 |
| 10% |
11.89 |
3.3 |
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 |
| Dec 19 |
125.00 |
1.00 |
8 |
12.5 |
2.00 (1.7%) |
| May 15 |
125.00 |
16.90 |
155 |
10.9 |
2.00 (1.7%) |
| 5% Yield On TSEM Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
125.00 |
1.00 |
8 |
12.5 |
2.00 (1.7%) |
| May 15 |
125.00 |
16.90 |
155 |
10.9 |
2.00 (1.7%) |
| 10% Yield On TSEM Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
125.00 |
1.00 |
8 |
12.5 |
2.00 (1.7%) |
| May 15 |
125.00 |
16.90 |
155 |
10.9 |
2.00 (1.7%) |
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