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 |
| 42.43 |
44.31 |
43.41 |
-0.02 |
456K |
10 |
4.7B |
TSEM Dividend-Like Income Using Covered Calls
With TSEM at 43.41, 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% |
1.30 |
0.4 |
| 5% |
2.17 |
0.6 |
| 10% |
4.34 |
1.2 |
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 |
| Nov 15 |
45.00 |
0.15 |
9 |
1.7 |
0.69 (1.6%) |
| Dec 20 |
45.00 |
0.25 |
44 |
0.6 |
0.69 (1.6%) |
| 5% Yield On TSEM Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Nov 15 |
45.00 |
0.15 |
9 |
1.7 |
0.69 (1.6%) |
| Dec 20 |
46.00 |
0.30 |
44 |
0.7 |
1.69 (3.9%) |
| 10% Yield On TSEM Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Nov 15 |
45.00 |
0.15 |
9 |
1.7 |
0.69 (1.6%) |
| Dec 20 |
47.00 |
0.95 |
44 |
2.2 |
2.69 (6.2%) |
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