Wednesday, June 24, 2015

China Mobile Income in a down market

I find the market so interesting.  You can rarely predict what is going to benefit you.  Today the market is down over 140 points.  Calls expired last Friday and today I see some good opportunities to make additional income from selling covered calls on those positions where covered calls expired last week.

China Mobile, symbol CHL,  is not a dividend machine but it does pay about 2.6% in dividend yield.  You get paid to wait.  I have owned it quite a while.  If you add today, you will pay about $66.35 and you can sell a September $70 call for about $1.65 and if you own it on 9/2, you are highly likely to receive the next quarterly dividend.

Although CHL is not a dividend machine because the yield is too low and the dividend increases are affected by currency exchange issues, the D/E ratio of only .0058 makes the risk worth it for me.

The table below presents data on the call I sold today.


Disclosure:  Long CHL with calls