Wednesday, November 18, 2015
DBD an opportunit to dump it when pocketing extra income
I wrote up a post about DBD during the summer where I profiled several call options that could make DBD owner's some nice income. You can find that link here:http://www.themoneymadam.com/2015/06/diebold-selling-calls-to-lock-in-gain.html .
The calls described above had expiration dates in August and they expired. Last month on October 12, I sold $35 calls that were to expire this Friday, November 20, 2015. The call premium I received was $.40 per contract. I have owned my shares since October 2012, I have received regular quarterly dividends during that time with a yield on my basis of 3.89%.
I wanted to unload DBD because the dividend is no longer growing and recently their EPS has slipped below their dividend payout. I sold calls that I thought had a good chance of being called away, also known as assigned.
Indeed today someone took the last of my DBD. The table below shows the gain from this transaction not including the dividend.
Today, DBD is trading above $36 so the call buyer also benefits as he/she bought today at $35 and could sell for an immediate gain of just over $1.00. I prefer the trade I made.
While DBD qualified as a Dividend Machine in 2012 and I have to keep it in the model portfolio, I personally am happy that I was able to unload it while at the same time adding to income.