CTSH Dividend Type Payments

Cognizant Technology Solutions Corporation - Class A dividend

Although CTSH has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Cognizant Technology Solutions Corporation - Class A to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 4:16 PM ET):

Cognizant Technology Solutions Corporation - Class A (CTSH)
Bid Ask Last Change Volume P/E Market Cap
65.60 67.19 66.94 +0.18 2.7M 16 33B

CTSH Dividend-Like Income Using Covered Calls

With CTSH at 66.94, 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% 2.01 0.6
5% 3.35 0.9
10% 6.69 1.8

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 CTSH Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 17 67.50 2.05 22 9.3 0.31 (0.5%)
Jun 21 67.50 2.65 57 4.6 0.31 (0.5%)
5% Yield On CTSH Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 17 67.50 2.05 22 9.3 0.31 (0.5%)
Jun 21 67.50 2.65 57 4.6 0.31 (0.5%)
10% Yield On CTSH Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 17 67.50 2.05 22 9.3 0.31 (0.5%)
Jun 21 67.50 2.65 57 4.6 0.31 (0.5%)

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