DM Dividend Type Payments

Desktop Metal, Inc. Class A dividend

Although DM has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Desktop Metal, 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 Thu 4:16 PM ET):

Desktop Metal, Inc. Class A (DM)
Bid Ask Last Change Volume P/E Market Cap
0.81 0.85 0.83 -0.03 2.5M - 0.3B

DM Dividend-Like Income Using Covered Calls

With DM at 0.83, 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% 0.02 0.0
5% 0.04 0.0
10% 0.08 0.0

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 DM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 17 1.00 0.05 30 0.2 0.15 (18.1%)
Aug 16 1.00 0.10 121 0.1 0.15 (18.1%)
5% Yield On DM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 17 1.00 0.05 30 0.2 0.15 (18.1%)
Aug 16 1.00 0.10 121 0.1 0.15 (18.1%)
10% Yield On DM Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
May 17 1.00 0.05 30 0.2 0.15 (18.1%)
Aug 16 1.00 0.10 121 0.1 0.15 (18.1%)

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