BAND Dividend Type Payments
Although BAND has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Bandwidth Inc. - Class A to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):
| Bandwidth Inc. - Class A (BAND) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 14.64 |
16.08 |
15.23 |
+0.06 |
179K |
- |
0.5B |
BAND Dividend-Like Income Using Covered Calls
With BAND at 15.23, here's a table showing how big the annual "dividend" (i.e. total annual call premium received) would need to be to attain 3%, 5%, and 10% annual yields. Also shown is the equivalent number of cents/day necessary to achieve each yield:
| Annual Yield |
Annual Premium |
Cents/Day |
| 3% |
0.46 |
0.1 |
| 5% |
0.76 |
0.2 |
| 10% |
1.52 |
0.4 |
So now we need to find out of the money covered calls that pay at least the prescribed cents/day amount of time premium. That will generate income and, because they are out of the money, leave room for some upside potential on the stock. Here are some examples:
| 3% Yield On BAND Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Nov 21 |
17.50 |
0.60 |
40 |
1.5 |
1.42 (9.3%) |
| May 15 |
17.50 |
1.40 |
215 |
0.7 |
1.42 (9.3%) |
| 5% Yield On BAND Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Nov 21 |
17.50 |
0.60 |
40 |
1.5 |
1.42 (9.3%) |
| May 15 |
17.50 |
1.40 |
215 |
0.7 |
1.42 (9.3%) |
| 10% Yield On BAND Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Nov 21 |
17.50 |
0.60 |
40 |
1.5 |
1.42 (9.3%) |
| May 15 |
17.50 |
1.40 |
215 |
0.7 |
1.42 (9.3%) |
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