IDCC Dividend Type Payments

INTERDIGITAL dividend

Although IDCC has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on INTERDIGITAL to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 10:10 AM ET):

INTERDIGITAL (IDCC)
Bid Ask Last Change Volume P/E Market Cap
72.57 72.80 72.80 +0.10 11K 20 2.5B

IDCC Dividend-Like Income Using Covered Calls

With IDCC at 72.80, here's a table showing how big the annual "dividend" (ie. 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% 2.18 0.6
5% 3.64 1.0
10% 7.28 2.0

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 IDCC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 80.00 0.35 29 1.2 7.20 (9.9%)
Dec 21 82.50 0.45 64 0.7 9.70 (13.3%)
5% Yield On IDCC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 80.00 0.35 29 1.2 7.20 (9.9%)
Dec 21 80.00 0.80 64 1.3 7.20 (9.9%)
10% Yield On IDCC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 77.50 0.70 29 2.4 4.70 (6.5%)
Dec 21 75.00 2.05 64 3.2 2.20 (3.0%)

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Want more examples? IDA Dividend | IDEV Dividend