By Robert Hauver
U.S. Mobility, USMO, currently is the highest dividend paying stock in the telecom section of our High Dividend Stocks Sector tables.
A leading wireless communications provider to healthcare, government organizations, and large enterprise companies, USMO’s has the largest one-way and advanced two-way paging systems in the U.S. They focus on business-to-business, and supply a majority of the Fortune 1000 U.S. firms.
At today’s price of $10.64, USMO currently has a very attractive dividend yield of 9.40%, and has very attractive financial ratios vs. the wireless communications industry, in our industry comparison table:
|Total Debt/Equity||NO DEBT||125.00%|
USMO has a well-covered dividend, with a dividend payout ratio of 65.60%. In addition, they just announced that they’ll continue their share buyback program for the 1st quarter of 2010.
USMO pays a $.25/share dividend on a quarterly basis, and its next ex-dividend date should be approx. Feb. 13, 2010, with a payout date of approx. March 9, 2010, (this hasn’t been declared yet).
For those investors looking for additional yields or downside protection, there are also option trading strategies available for USMO, such as covered calls, or selling put options.
The July $12.50 call, UEFGV, has a bid/ask spread of $.35 to $.60, so selling this option in a covered call trade would net you an additional 3.3% over 7-plus months, in addition to the $.50/share in dividends, (4.7%), you’d probably get paid during this period.
If assigned, you’d realize an additional $1.86/share, or 17.48%.
The July $10.00 put, UEFSB, is now bid at $.95, an 8.93% yield for 7-plus months.
All things considered, USMO looks like one of the best stocks in the wireless field.
Disclosure: Author owns USMO shares.
Disclaimer: This article is for informational purposes only.