MLNX Dividend Type Payments

MELLANOX TECHNOLOGIES dividend

Although MLNX has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on MELLANOX TECHNOLOGIES to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 4:16 PM ET):

MELLANOX TECHNOLOGIES (MLNX)
Bid Ask Last Change Volume P/E Market Cap
73.27 80.00 73.27 +1.38 304K 68 3.8B

MLNX Dividend-Like Income Using Covered Calls

With MLNX at 73.27, 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% 2.20 0.6
5% 3.66 1.0
10% 7.33 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 MLNX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 85.00 0.35 32 1.1 5.00 (6.8%)
Dec 21 87.50 0.60 67 0.9 7.50 (10.2%)
5% Yield On MLNX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 85.00 0.35 32 1.1 5.00 (6.8%)
Dec 21 85.00 0.85 67 1.3 5.00 (6.8%)
10% Yield On MLNX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 80.00 1.05 32 3.3 0.00 (0.0%)
Dec 21 80.00 1.90 67 2.8 0.00 (0.0%)

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