TAL Dividend Type Payments

TAL Education Group ADS dividend

Although TAL has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on TAL Education Group ADS 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):

TAL Education Group ADS (TAL)
Bid Ask Last Change Volume P/E Market Cap
32.00 32.84 32.58 -0.16 2.2M - 19B

TAL Dividend-Like Income Using Covered Calls

With TAL at 32.58, 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% 0.98 0.3
5% 1.63 0.4
10% 3.26 0.9

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 TAL Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 37.00 0.10 29 0.3 4.16 (12.8%)
May 17 42.00 0.30 92 0.3 9.16 (28.1%)
5% Yield On TAL Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 36.00 0.20 29 0.7 3.16 (9.7%)
May 17 40.00 0.50 92 0.5 7.16 (22.0%)
10% Yield On TAL Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 35.00 0.40 29 1.4 2.16 (6.6%)
May 17 38.00 0.85 92 0.9 5.16 (15.8%)

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