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 Tue 4:16 PM ET):
| Shopify Inc. - Class A Subordinate Voting Shares (SHOP) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 163.56 |
164.60 |
163.74 |
-4.14 |
4.5M |
124 |
219B |
SHOP Dividend-Like Income Using Covered Calls
With SHOP at 163.74, 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% |
4.91 |
1.3 |
| 5% |
8.19 |
2.2 |
| 10% |
16.37 |
4.5 |
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 |
| Jan 2 |
165.00 |
1.28 |
4 |
32.0 |
0.40 (0.2%) |
| Feb 6 |
165.00 |
8.30 |
39 |
21.3 |
0.40 (0.2%) |
| 5% Yield On SHOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 2 |
165.00 |
1.28 |
4 |
32.0 |
0.40 (0.2%) |
| Feb 6 |
165.00 |
8.30 |
39 |
21.3 |
0.40 (0.2%) |
| 10% Yield On SHOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jan 2 |
165.00 |
1.28 |
4 |
32.0 |
0.40 (0.2%) |
| Feb 6 |
165.00 |
8.30 |
39 |
21.3 |
0.40 (0.2%) |
Want to increase dividends with covered calls? Sign Up For A Free Trial
