NXT Dividend Type Payments

Nextpower Inc. - Class A dividend

Although NXT has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Nextpower 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):

Nextpower Inc. - Class A (NXT)
Bid Ask Last Change Volume P/E Market Cap
118.56 122.80 121.37 +6.93 1.9M 29 17B

NXT Dividend-Like Income Using Covered Calls

With NXT at 121.37, 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% 3.64 1.0
5% 6.07 1.7
10% 12.14 3.3

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 NXT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 20 125.00 3.50 15 23.3 2.20 (1.8%)
Mar 20 125.00 8.40 43 19.5 2.20 (1.8%)
5% Yield On NXT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 20 125.00 3.50 15 23.3 2.20 (1.8%)
Mar 20 125.00 8.40 43 19.5 2.20 (1.8%)
10% Yield On NXT Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 20 125.00 3.50 15 23.3 2.20 (1.8%)
Mar 20 125.00 8.40 43 19.5 2.20 (1.8%)

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