Today, 6/18/12, I bought 100 PGH shares at a net cost of $699.94 and sold 1 Jan13 $8 Covered Call for a net premium income of $7.24 in an IRA account. My basis for these PGH shares is now $6.93. These transactions represent a simple return of about 1.04% and an annualized return of about 1.77% if held to maturity.
It has been several years since I have owned any PGH. I decided to buy some this time because I am still looking at increasing my dividend income and PGH pays a monthly dividend of seven-cents for about a 12.16% yield. Speaking of dividends, PGH goes ex-dividend in two day so I should be just in time to capture the next dividend.
I am currently considering PGH as something of a trade and would probably be content if it is called away in January. I primarily bought it for the monthly dividends and will decide if I want to continue to own it for the dividends if the price moves above my strike price. I may just decide to roll the January Call out…if I can.
S&P does not have a price target or recommendation on PGH. MarketEdge has an Avoid rating and a price opinion to $9.40. The 2 Yahoo! Finance analysts have a 1-year price target of $11.25 and a recommendation of 2.5 where 1.0 is a Strong Buy and 5.0 is a Strong Sell.