FOUR Dividend Type Payments
Although FOUR has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Shift4 Payments, 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 Fri 4:16 PM ET):
| Shift4 Payments, Inc. Class A (FOUR) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 68.00 |
71.00 |
69.01 |
+3.41 |
1.9M |
31 |
5.8B |
FOUR Dividend-Like Income Using Covered Calls
With FOUR at 69.01, 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% |
2.07 |
0.6 |
| 5% |
3.45 |
0.9 |
| 10% |
6.90 |
1.9 |
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 FOUR Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
75.00 |
1.30 |
29 |
4.5 |
4.00 (5.8%) |
| Jan 16 |
72.50 |
3.40 |
57 |
6.0 |
1.50 (2.2%) |
| 5% Yield On FOUR Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
75.00 |
1.30 |
29 |
4.5 |
4.00 (5.8%) |
| Jan 16 |
72.50 |
3.40 |
57 |
6.0 |
1.50 (2.2%) |
| 10% Yield On FOUR Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
75.00 |
1.30 |
29 |
4.5 |
4.00 (5.8%) |
| Jan 16 |
72.50 |
3.40 |
57 |
6.0 |
1.50 (2.2%) |
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