CVNA Dividend Type Payments
Although CVNA has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Carvana Co. 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):
| Carvana Co. Class A (CVNA) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 84.08 |
84.48 |
84.31 |
+6.81 |
4.9M |
103 |
16B |
CVNA Dividend-Like Income Using Covered Calls
With CVNA at 84.31, 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% |
2.53 |
0.7 |
| 5% |
4.22 |
1.2 |
| 10% |
8.43 |
2.3 |
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 CVNA Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 3 |
100.00 |
1.82 |
8 |
22.8 |
15.52 (18.4%) |
| May 10 |
100.00 |
2.47 |
15 |
16.5 |
15.52 (18.4%) |
| 5% Yield On CVNA Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 3 |
100.00 |
1.82 |
8 |
22.8 |
15.52 (18.4%) |
| May 10 |
100.00 |
2.47 |
15 |
16.5 |
15.52 (18.4%) |
| 10% Yield On CVNA Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 3 |
100.00 |
1.82 |
8 |
22.8 |
15.52 (18.4%) |
| May 10 |
100.00 |
2.47 |
15 |
16.5 |
15.52 (18.4%) |
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