Own TEL Stock? Here Is How To Collect 12% A Year On It

Here is a way to get paid a meaningful income now on TE Connectivity shares you already own, an income you keep no matter what, in exchange for capping your gains at a higher price.

TE Connectivity (TEL) is in an interesting spot, delivering record Q3 orders and adjusted EPS with revenue up 14% year-over-year, and guiding for more double-digit growth. Yet its stock trades about 14% below its 52-week high and has underperformed the S&P 500 over the past year. For owners of the stock, this sets up a classic dilemma: wait for the market to reward the company’s performance, or take matters into your own hands? One options trade offers a strong way to do just that, paying you a significant income stream right now on shares you already hold.

12% annualized income on TEL shares you already own, with 15% of upside room, by selling a covered call.

• You own (or buy) 100 shares of TEL near today’s price of $218.02.
• Sell one call option on TEL expiring 8/20/2027, with a strike price of $250, about 15% above today.
• Collect roughly $2,790 in premium up front per contract (each contract covers 100 shares), which you keep no matter what the stock does.
• That premium is about 12.3% annualized on the $21,802 of stock, income you earn just for holding.
• If TEL finishes above $250, your shares are called away at $250. Counting the premium, your total return works out to about 26% annualized, but you give up any gains above the strike.

Either Way, The Premium Is Yours To Keep

If TEL finishes below $250 on 8/20/2027, the call expires worthless, and you keep the full $2,790 premium and all your shares. That is about 13% over 380 days, income earned just for holding, and you are free to sell another call.

If TEL finishes above $250, your 100 shares are called away at $250. You still keep the $2,790 premium, and counting it your total gain works out to about 27% over the holding period (about 26% annualized), a healthy exit. The cost of the trade is that any gain above $250 is no longer yours. And if the stock instead falls, you keep the premium but still ride the shares down, cushioned only slightly.

So the whole trade comes down to one thing: how much of that upside are you really likely to give up, and would you be content to sell at that higher price?

The Real Question: How Much Upside Is At Stake?

The only real cost is the opportunity you give up if the stock suddenly takes off well beyond your exit price. So, how much upside are you really capping? The bull case is straightforward and powerful: the company is sitting on a mountain of demand. Management just reported “record order levels of $5.7 billion,” a 27% jump from last year, and a book-to-bill ratio of 1.1, meaning orders are coming in faster than they can be filled. This has built a “record backlog position, and this backlog position is a strong growth indicator as we move into our fiscal 2027.” If that backlog starts converting to revenue faster than Wall Street expects, the stock could easily run, and you would miss the gains above your agreed-upon selling price.

But there’s a reason the stock isn’t already at new highs, and it’s a question of timing. An analyst on the latest earnings call pointedly asked why, with such incredible AI order momentum, revenue in the Digital Data Networks business wasn’t tracking higher this year. Management answered that “this momentum is really going to deliver more into next year than increases to this year.” That suggests the payoff could be lumpy and further out than the headline order numbers imply. For a patient investor, that might be fine, but for someone looking at this trade, it makes collecting a guaranteed income now in exchange for capping that uncertain future upside a very logical move. The key thing to watch is the revenue growth in the Digital Data Networks business; if that starts to accelerate sooner than expected, the bulls have the upper hand.

What Income Could Your Own Stocks Pay?      

You may not own TEL, but you almost certainly own something that could be paying you. Our Covered Call Finder lets you type in a stock, or a few, and instantly see the income a covered call could generate on each, then dial the strike up or down with a slider to balance more income against more upside. It is the quickest way to see what the names in your own portfolio could pay.

One step out from a single name: our ETF Scorecard shows how the technology funds stack up. A sector fund owns the whole group at once, so no single company can sink you, though it still lives or dies by that one theme, which is the gap the portfolio below closes.

Income From One Name, Stability From Many

Getting paid to cap the upside on a stock you own is a smart way to squeeze income from it. But a single covered call, and even a single-theme fund, still rides one slice of the market. What steadies a portfolio is breadth across sectors, where a rough stretch for one industry is offset by a good one elsewhere.

The Trefis High Quality (HQ) Portfolio provides that breadth: roughly 30 quality, cash-generative companies spanning sectors, judged on the full picture of their fundamentals rather than one options setup, and re-balanced as conditions change. It carries a track record of outpacing a benchmark that combines the three major indices – the S&P 500, S&P Mid-cap, and Russell 2000. Keep collecting premium on individual names, with a cross-sector core doing the heavy lifting.