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 Mon 4:16 PM ET):
| Shake Shack, Inc. Class A (SHAK) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 85.85 |
88.50 |
86.12 |
-1.36 |
1.7M |
86 |
3.9B |
SHAK Dividend-Like Income Using Covered Calls
With SHAK at 86.12, 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% |
2.58 |
0.7 |
| 5% |
4.31 |
1.2 |
| 10% |
8.61 |
2.4 |
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 SHAK Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
90.00 |
0.05 |
5 |
1.0 |
1.50 (1.7%) |
| Dec 12 |
89.00 |
0.65 |
12 |
5.4 |
0.50 (0.6%) |
| 5% Yield On SHAK Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 12 |
89.00 |
0.65 |
12 |
5.4 |
0.50 (0.6%) |
| Dec 19 |
89.00 |
1.40 |
19 |
7.4 |
0.50 (0.6%) |
| 10% Yield On SHAK Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 12 |
89.00 |
0.65 |
12 |
5.4 |
0.50 (0.6%) |
| Dec 19 |
89.00 |
1.40 |
19 |
7.4 |
0.50 (0.6%) |
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