TDG Dividend Type Payments

Transdigm Group, Inc dividend

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

Transdigm Group, Inc (TDG)
Bid Ask Last Change Volume P/E Market Cap
438.00 453.82 453.73 +8.11 234K 31 24B

TDG Dividend-Like Income Using Covered Calls

With TDG at 453.73, 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% 13.61 3.7
5% 22.69 6.2
10% 45.37 12.4

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 TDG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 480.00 1.60 29 5.5 26.18 (5.8%)
May 17 500.00 3.60 58 6.2 46.18 (10.2%)
5% Yield On TDG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 470.00 3.60 29 12.4 16.18 (3.6%)
May 17 490.00 5.60 58 9.7 36.18 (8.0%)
10% Yield On TDG Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 460.00 7.20 29 24.8 6.18 (1.4%)
May 17 480.00 8.00 58 13.8 26.18 (5.8%)

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