MTSC Dividend

MTS SYSTEMS dividend

Although MTSC has a dividend of 0.30 with an ex-dividend date of Sep 14, you can sell covered calls on MTS SYSTEMS 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):

MTS SYSTEMS (MTSC)
Bid Ask Last Change Volume P/E Market Cap
51.80 52.00 51.80 0.00 95K 18 0.9B

MTSC Dividend-Like Income Using Covered Calls

With MTSC at 51.80, 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% 1.55 0.4
5% 2.59 0.7
10% 5.18 1.4

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 MTSC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 55.00 0.45 64 0.7 3.00 (5.8%)
Jan 18 55.00 1.65 155 1.1 3.00 (5.8%)
5% Yield On MTSC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 18 55.00 1.65 155 1.1 3.00 (5.8%)

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