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 |
| 27.50 |
28.34 |
27.80 |
+0.14 |
3.2M |
17 |
7.2B |
DBX Dividend-Like Income Using Covered Calls
With DBX at 27.80, 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% |
0.83 |
0.2 |
| 5% |
1.39 |
0.4 |
| 10% |
2.78 |
0.8 |
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 DBX Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 6 |
29.00 |
0.35 |
38 |
0.9 |
0.66 (2.4%) |
| Jan 9 |
28.50 |
0.10 |
10 |
1.0 |
0.16 (0.6%) |
| 5% Yield On DBX Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 6 |
29.00 |
0.35 |
38 |
0.9 |
0.66 (2.4%) |
| Jan 9 |
28.50 |
0.10 |
10 |
1.0 |
0.16 (0.6%) |
| 10% Yield On DBX Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 6 |
29.00 |
0.35 |
38 |
0.9 |
0.66 (2.4%) |
| Jan 9 |
28.50 |
0.10 |
10 |
1.0 |
0.16 (0.6%) |
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