Tuesday, March 7, 2017

Target (TGT) Call Option

My call option target criteria are (1) strike price 8% above cost basis (2) premium equal to or greater than 1% of strike price (3) expiration date after the next ex-dividend date and (4) a total return of no less than 10% if the call is exercised and the stock assigned.

Target symbol TGT has been talked about by dividend investors due to the juicy yield of  4.18%.  Value investors see an opportunity because of recent price pressure.  TGT just breached its 52 week low.

Here is a call option of interest today.

My major concern is Target's debt to equity ratio of 1.159 which is a bit above my level of comfort.  Walmart's (WMT) D/E is only .5061

M* MoneyMadam

Disclosure:  Long WMT