CGNX Dividend Type Payments

Cognex Corp dividend

Although CGNX has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Cognex Corp to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 10:15 AM ET):

Cognex Corp (CGNX)
Bid Ask Last Change Volume P/E Market Cap
42.78 42.85 42.84 -0.19 108K 35 7.4B

CGNX Dividend-Like Income Using Covered Calls

With CGNX at 42.84, here's a table showing how big the annual "dividend" (ie. 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% 1.29 0.4
5% 2.14 0.6
10% 4.28 1.2

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 CGNX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 16 50.00 0.15 31 0.5 7.15 (16.7%)
Nov 15 55.00 0.45 122 0.4 12.15 (28.4%)
5% Yield On CGNX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 16 45.00 1.15 31 3.7 2.15 (5.0%)
Nov 15 50.00 1.25 122 1.0 7.15 (16.7%)
10% Yield On CGNX Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 16 45.00 1.15 31 3.7 2.15 (5.0%)
Nov 15 45.00 2.80 122 2.3 2.15 (5.0%)

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