SEM Dividend Type Payments

SELECT MEDICAL HOLDINGS dividend

Although SEM has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SELECT MEDICAL HOLDINGS to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 1:10 PM ET):

SELECT MEDICAL HOLDINGS (SEM)
Bid Ask Last Change Volume P/E Market Cap
16.74 16.76 16.75 -0.34 135K 12 2.3B

SEM Dividend-Like Income Using Covered Calls

With SEM at 16.75, 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% 0.50 0.1
5% 0.84 0.2
10% 1.68 0.5

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 SEM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 19.00 0.05 26 0.2 2.24 (13.4%)
Dec 21 19.00 0.15 61 0.2 2.24 (13.4%)
5% Yield On SEM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 18.00 0.20 26 0.8 1.24 (7.4%)
Dec 21 19.00 0.15 61 0.2 2.24 (13.4%)
10% Yield On SEM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 18.00 0.20 26 0.8 1.24 (7.4%)
Dec 21 18.00 0.35 61 0.6 1.24 (7.4%)

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