Today, 5/8/12, I BTC 4 Sep12 TIE $17 Covered Calls and STO 4 Sep12 $16 Covered Calls for a net deposit of $159.94 in 2 contracts in each of 2 IRA accounts.  My basis for these TIE shares is now $13.69 and $14.22, excluding dividends received.  These transactions represent a simple returns of about 2.80% / 2.77% and annualized returns of about 7.41% / 7.32 respectively,  if held to expiration.

When I sold the September $17 calls last month I had wanted to sell a higher strike price but with TIE currently moving down at the time I decided to go ahead and sell the Sep $17 options.  Now, with TIE falling along with the rest of the market and TIE not having been above $16 since February I felt that I could gather some additional cash flow with this roll down.  I am rather confident that I can roll these calls up and out if necessary.

I am considering these TIE shares as part of my core holding for at least the foreseeable future.  Titanium is a metal that is used a lot in the aerospace industry, which is still in the early stages of a multi-year growth period.  I read that the new Boeing 787 Dreamliner uses a massive 116 metric tons of Titanium.  The resumed dividend and the option premiums available for TIE fit my general investment goals.  The tie in to the aerospace industry is an added bonus.

S&P has a 12-month price target of $18.00 and a Buy recommendation.  MarketEdge a price opinion of $14.10 and a Neutral recommendation.  Neither S&P nor MarketEdge have a very good track record predicting TIE price movements over the past year though.  The 3 YHOO analysts have a 12-month price target of $17.83 and a rating of 2.2 where 1.0 is a Strong Sell and 5.0 is a Strong Buy.

Today, 4/25/12, I sold 2 Sep12 TIE $17 Covered Calls for a net deposit of $50.48 in an IRA account.  My basis for these TIE shares is now $14.62, excluding dividends received.  This transaction represents a simple return of about 1.69% and an annualized return of about 4.10% if held to expiration.

I am considering these TIE shares as part of my core holding for at least the foreseeable future.  Titanium is a metal that is used a lot in the aerospace industry, which is still in the early stages of a multi-year growth period.  I read that the new Boeing 787 Dreamliner uses a massive 116 metric tons of Titanium, and Boeing has something like a 7 year order backlog on the books.  The dividend and the option premiums available for TIE fit my general investment goals.  The tie in to the aerospace industry is an added bonus.

TIE pays a.075 quarterly dividend, which represents about a 2.10% yield on the current price and a fractionally larger yield on my basis.

S&P has a 12-month price target of $18.00, down from an earlier $19.00, with a continuing Buy recommendation.  MarketEdge has lowered it price opinion to $14.10 from an earlier $14.85, and now has a Neutral recommendation, up from an earlier Avoid, on TIE.  Neither S&P nor MarketEdge have a very good track record predicting TIE price movements over the past year though.  The 3 YHOO analysts continue a 12-month price target of $17.17and a rating of 2.6, where 1.0 is a strong sell and 5.0 is a string buy.

Many of the stocks that I own and write Covered Calls upon also pay dividends.  Dividends occur on a regular basis and add significantly to my annual investment income.  Year to date I have received a total of $2,785.01 in dividends in my various accounts for 2012.  My year to date average monthly dividends received is currently $928.34.  The year-to-date dividends currently represent about 30.84% of my average monthly investment cash flow and about 2.49% return on my current basis value.

My YTD dividends are up by $140.42 on a monthly average from last year.  That represents a 17.82% increase to date year over year.  I attribute the increased dividends to a few companies raising their dividends and to my purchasing additional dividend paying stocks.  During February, I received notice of the following dividends paid in various accounts for a total of $1,006.79.

Please notice that PGF is an ETF and pays dividends monthly.  The annualized dividend yield for PGF is based upon the simple and false assumption that it will pay the same dividend each month for the next 12 months.  The actual annualized dividend yield may be more or less than illustrated here.

The DCIX shares are ones I received as a split off from Diana Shipping (DSX).  I had thought about just selling them but there are so few and the trading cost would chew up so much relative to what I would receive that I decided to keep them, at least for now, and collect the little dividends that they throw off.

I use my basis per share to determine the simple and annualized percentage return because I feel that it gives me a better representation of the value of the dividends as they relate to my portfolio.  My basis may be above or below the market price which causes my return to be lower or higher than published yields for a stock.  I calculate my basis per share as my acquisition price less any option premiums received on those shares.  I do not use dividends to reduce my basis.