Skyworks Surges A Few Calls To Consider

|
Includes: SWKS
by: The Money Madam
Summary

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

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.

I own Skyworks (NASDAQ: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.

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.