SHAK Dividend Type Payments
Although SHAK has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Shake Shack, 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):
| Shake Shack, Inc. Class A (SHAK) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 102.80 |
104.91 |
104.71 |
-1.42 |
621K |
166 |
4.5B |
SHAK Dividend-Like Income Using Covered Calls
With SHAK at 104.71, 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% |
3.14 |
0.9 |
| 5% |
5.24 |
1.4 |
| 10% |
10.47 |
2.9 |
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 SHAK Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Nov 1 |
105.00 |
6.30 |
36 |
17.5 |
0.09 (0.1%) |
| Oct 4 |
105.00 |
1.80 |
8 |
22.5 |
0.09 (0.1%) |
| 5% Yield On SHAK Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Nov 1 |
105.00 |
6.30 |
36 |
17.5 |
0.09 (0.1%) |
| Oct 4 |
105.00 |
1.80 |
8 |
22.5 |
0.09 (0.1%) |
| 10% Yield On SHAK Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Nov 1 |
105.00 |
6.30 |
36 |
17.5 |
0.09 (0.1%) |
| Oct 4 |
105.00 |
1.80 |
8 |
22.5 |
0.09 (0.1%) |
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