In the first 2 parts of this series, we have the following criteria:
a high dividend yield – more than 5% (The S & P 500 average return is about 3.42 %).
2 moderate payout ratio – less than 50% (The S & P dividend payout ratio is about 59 %).
3.Less 40% Above 52 last week *
4 options available
5 Ratio: More than 1.5
6 Long-term debt to equity: Under 0.5
As the market continues to rally, it is more difficult to find good stocks always close them down, so I set the screen # 3: More than 50% below 52 week high. “
Adjusted screen identified Olin Corp. (OLN), a chemicals company based Materials-Synthetics/Diversified, 2-chloro-alkali divisions and specialty chemicals and ammunition for the army. Olin currently has a good dividend yield of almost 6% and its payout ratio of less than 37% is very low for a stock dividend Olin high ratios of debt to equity are strong and the same for the long-term debt and short-term: 33%The current ratio is about 1.9, meaning that their assets will be nearly double that of their liabilities
OLN is also cheap .. other parameters: growth
: The PEG ratio is only 0.57, (slightly less than 1 is considered a good value)
Price / book value ( P / B): only 1.40
price / earnings (P / E): 6.17
management settings are solid: Back
on equity (ROE): 22% back
on investment (ROI): 12.24% Return
on assets (ROA). 9.67%, and not a very high value, but still respectable
As part of its diversified peer group of chemicals, they have the best dividend yield and the lowest P / E.
Since OLN a play option Camp You can cover more goose their yields dividend raised by sales calls. Currently covered in January, offering 0.10 Call.
We offer the following example shows to buy 100 shares of OLN basis have for option contracts on the 100 Units of the underlying underlying shares are linked. (We are all income on an annual basis. this book, because the options expire in less than 12 months, and at different moments of annualization is a better basis for comparing investments)
Here are the latest figures from the high efficiency, low-risk commercial.
1st purchase 100 shares at 0.38
2 Sell January 1, 2010 Contract Appeals (YSOAC symbol) to 0.10 to 0.00
3rd Earn 2 dividends totaling $ .40/share before the option for $ 0.00
If 2010 is the expiration date Jan. 16, there 2 options:
1. Allocation – When to get OLN or 0.10 spent, your 100 shares will be sold / 0.00 assigned to the base price, so you .62/share additional gain (0 , 00-.38 cost per action)
2 Static -.. If OLN is not on or in the past, 0.10, is to keep you on your new 100 shares breakeven increase of 0.88 (0.38 0.10 -. Call premium – $ 0.40 dividend)
The annualized return of this trade are:
Dividend Yield: 4 92% ($ .40/share)
Call of return: 13.52% (.10/share)
The static total return (dividends + Call): 18.84%
Assigned Potential yield: 19.9% ??(.62/share)
38.74% total potential
Break Even: Price: 0.88 Yield
Mapping “trigger” price: 0.10
Trade The minimum income / Static give you this by buying and OLN covered call’ll do is, 0 / 100 shares (18.84 p %).> The maximum income you make is 2 / 100 shares (38.74 p %).> your capital here your static efficiency 18.84%
increase yields dramatically higher your income, sale of covered options, too.
Determine exactly what your minimum income of each businessquantifiable benefit your maximum potential. sale of a call determines your exit strategy, because it forces you to sell at that price, no matter how high is Unit.
Reduces the net amount of cash that you have linked in trade.
-Increase your protection against declines in prices and reductions in dividends, which you call the yield is generally higher that the dividend yield.
So now you have locked in more than 18% of the capital by doubling your dividend, improve your cash flow and set for a possible +38% of profits. Most fishermen would agree that these figures would a day> trip …
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