Wednesday, February 6, 2019

Skyworks Surges a few calls to consider

I own Skyworks, symbol SWKS, and I trade it by using covered calls because the dividend is a paltry 1.78% which is too low just to hold it.  

The call illustrated below is of interest to me.  It captures the quarterly dividend as the expiration date is after the ex-dividend date of 2/28/19.  When you add in the call premium, your income yield goes up to 2.25%.   If you are called away you get some capital gain. 

SWKS is on solid ground: no debt, a P/E ratio less than 15 and good revenue growth.  SWKS is volatile enough, beta is 1.28 (source Nasdaq) that you can sell calls several times during a year.

Now if you want to go out further with a higher strike price and bigger premium, consider the May, 17, 2019 expiration with a $95.00 strike price.

Several options (pardon the pun) for a conservative income investor.

M* MoneyMadam

Disclosure:  Long SWKS with calls