TDS Dividend Type Payments

Telephone & Data Systems, Inc dividend

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

Telephone & Data Systems, Inc (TDS)
Bid Ask Last Change Volume P/E Market Cap
30.21 30.92 30.72 -0.85 316K - 3.6B

TDS Dividend-Like Income Using Covered Calls

With TDS at 30.72, 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% 0.92 0.3
5% 1.54 0.4
10% 3.07 0.8

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 TDS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 16 35.00 0.40 87 0.5 4.08 (13.3%)
Nov 15 35.00 0.90 178 0.5 4.08 (13.3%)
5% Yield On TDS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 16 35.00 0.40 87 0.5 4.08 (13.3%)
Nov 15 35.00 0.90 178 0.5 4.08 (13.3%)

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