BAND Dividend Type Payments
Although BAND has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Bandwidth 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):
| Bandwidth Inc. - Class A (BAND) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 13.12 |
16.00 |
14.28 |
+0.52 |
227K |
- |
0.4B |
BAND Dividend-Like Income Using Covered Calls
With BAND at 14.28, 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% |
0.43 |
0.1 |
| 5% |
0.71 |
0.2 |
| 10% |
1.43 |
0.4 |
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 BAND Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
17.50 |
0.25 |
61 |
0.4 |
1.50 (10.5%) |
| Nov 21 |
17.50 |
0.95 |
159 |
0.6 |
1.50 (10.5%) |
| 5% Yield On BAND Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
17.50 |
0.25 |
61 |
0.4 |
1.50 (10.5%) |
| Nov 21 |
17.50 |
0.95 |
159 |
0.6 |
1.50 (10.5%) |
| 10% Yield On BAND Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
17.50 |
0.25 |
61 |
0.4 |
1.50 (10.5%) |
| Nov 21 |
17.50 |
0.95 |
159 |
0.6 |
1.50 (10.5%) |
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