SHOP Dividend Type Payments
Although SHOP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Shopify Inc. - Class A Subordinate Voting Shares 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):
| Shopify Inc. - Class A Subordinate Voting Shares (SHOP) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 172.70 |
172.82 |
172.94 |
-0.92 |
13.3M |
97 |
226B |
SHOP Dividend-Like Income Using Covered Calls
With SHOP at 172.94, 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% |
5.19 |
1.4 |
| 5% |
8.65 |
2.4 |
| 10% |
17.29 |
4.7 |
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 SHOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
172.50 |
13.45 |
33 |
39.8 |
0.00 (0.0%) |
| Nov 7 |
172.50 |
9.85 |
5 |
190.6 |
0.00 (0.0%) |
| 5% Yield On SHOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
172.50 |
13.45 |
33 |
39.8 |
0.00 (0.0%) |
| Nov 7 |
172.50 |
9.85 |
5 |
190.6 |
0.00 (0.0%) |
| 10% Yield On SHOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
172.50 |
13.45 |
33 |
39.8 |
0.00 (0.0%) |
| Nov 7 |
172.50 |
9.85 |
5 |
190.6 |
0.00 (0.0%) |
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