DBX Dividend Type Payments
Although DBX has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Dropbox, 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 Wed 4:16 PM ET):
| Dropbox, Inc. - Class A (DBX) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 26.50 |
26.71 |
26.78 |
+0.20 |
6.0M |
18 |
8.0B |
DBX Dividend-Like Income Using Covered Calls
With DBX at 26.78, 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% |
0.80 |
0.2 |
| 5% |
1.34 |
0.4 |
| 10% |
2.68 |
0.7 |
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 DBX Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 1 |
27.00 |
0.50 |
17 |
2.9 |
0.29 (1.1%) |
| Aug 8 |
27.00 |
0.85 |
24 |
3.5 |
0.29 (1.1%) |
| 5% Yield On DBX Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 1 |
27.00 |
0.50 |
17 |
2.9 |
0.29 (1.1%) |
| Aug 8 |
27.00 |
0.85 |
24 |
3.5 |
0.29 (1.1%) |
| 10% Yield On DBX Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 1 |
27.00 |
0.50 |
17 |
2.9 |
0.29 (1.1%) |
| Aug 8 |
27.00 |
0.85 |
24 |
3.5 |
0.29 (1.1%) |
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