CARG Dividend Type Payments
Although CARG has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on CarGurus, 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 10:00 AM ET):
| CarGurus, Inc. - Class A (CARG) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 23.14 |
23.17 |
23.14 |
+0.51 |
29K |
119 |
2.4B |
CARG Dividend-Like Income Using Covered Calls
With CARG at 23.14, 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% |
0.69 |
0.2 |
| 5% |
1.16 |
0.3 |
| 10% |
2.31 |
0.6 |
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 CARG Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 17 |
24.00 |
0.25 |
25 |
1.0 |
0.83 (3.6%) |
| Jun 21 |
26.00 |
0.15 |
60 |
0.3 |
2.83 (12.2%) |
| 5% Yield On CARG Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 17 |
24.00 |
0.25 |
25 |
1.0 |
0.83 (3.6%) |
| Jun 21 |
28.00 |
0.25 |
60 |
0.4 |
4.83 (20.9%) |
| 10% Yield On CARG Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 17 |
24.00 |
0.25 |
25 |
1.0 |
0.83 (3.6%) |
| Aug 16 |
24.00 |
1.55 |
116 |
1.3 |
0.83 (3.6%) |
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