TECH Dividend
Although TECH has a dividend of 0.08 with an ex-dividend date of May 19, you can sell covered calls on Bio-Techne Corp 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):
| Bio-Techne Corp (TECH) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 46.10 |
49.89 |
49.94 |
+0.16 |
3.0M |
50 |
7.9B |
TECH Dividend-Like Income Using Covered Calls
With TECH at 49.94, 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% |
1.50 |
0.4 |
| 5% |
2.50 |
0.7 |
| 10% |
4.99 |
1.4 |
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 TECH Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
50.00 |
1.05 |
8 |
13.1 |
0.11 (0.2%) |
| Oct 17 |
50.00 |
6.30 |
162 |
3.9 |
0.11 (0.2%) |
| 5% Yield On TECH Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
50.00 |
1.05 |
8 |
13.1 |
0.11 (0.2%) |
| Oct 17 |
50.00 |
6.30 |
162 |
3.9 |
0.11 (0.2%) |
| 10% Yield On TECH Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
50.00 |
1.05 |
8 |
13.1 |
0.11 (0.2%) |
| Oct 17 |
50.00 |
6.30 |
162 |
3.9 |
0.11 (0.2%) |
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