SIMO Dividend

Silicon Motion Technology Corporation - American Depositary Shares, each dividend

Although SIMO has a dividend of 0.50 with an ex-dividend date of Aug 7, you can sell covered calls on Silicon Motion Technology Corporation - American Depositary Shares, each 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):

Silicon Motion Technology Corporation - American Depositary Shares, each (SIMO)
Bid Ask Last Change Volume P/E Market Cap
51.00 54.00 53.54 +0.75 307K 77 1.6B

SIMO Dividend-Like Income Using Covered Calls

With SIMO at 53.54, 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% 1.61 0.4
5% 2.68 0.7
10% 5.35 1.5

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 SIMO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 16 55.00 0.30 8 3.8 1.00 (1.9%)
Sep 19 55.00 5.60 134 4.2 1.00 (1.9%)
5% Yield On SIMO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 16 55.00 0.30 8 3.8 1.00 (1.9%)
Sep 19 55.00 5.60 134 4.2 1.00 (1.9%)
10% Yield On SIMO Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 16 55.00 0.30 8 3.8 1.00 (1.9%)
Sep 19 55.00 5.60 134 4.2 1.00 (1.9%)

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