SNAP Dividend Type Payments
Although SNAP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Snap 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 Tue 4:16 PM ET):
| Snap Inc. Class A (SNAP) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 8.16 |
8.17 |
8.18 |
-0.09 |
20.5M |
- |
14B |
SNAP Dividend-Like Income Using Covered Calls
With SNAP at 8.18, 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% |
0.25 |
0.1 |
| 5% |
0.41 |
0.1 |
| 10% |
0.82 |
0.2 |
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 SNAP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jul 3 |
10.00 |
0.02 |
17 |
0.1 |
1.83 (22.4%) |
| Jul 11 |
10.00 |
0.03 |
25 |
0.1 |
1.83 (22.4%) |
| 5% Yield On SNAP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jul 3 |
10.00 |
0.02 |
17 |
0.1 |
1.83 (22.4%) |
| Jul 11 |
10.00 |
0.03 |
25 |
0.1 |
1.83 (22.4%) |
| 10% Yield On SNAP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jul 3 |
8.50 |
0.19 |
17 |
1.1 |
0.33 (4.0%) |
| Jul 11 |
8.50 |
0.27 |
25 |
1.1 |
0.33 (4.0%) |
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