FOUR Dividend Type Payments
Although FOUR has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Shift4 Payments, 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):
| Shift4 Payments, Inc. Class A (FOUR) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 71.47 |
72.47 |
72.16 |
+7.16 |
3.9M |
246 |
5.7B |
FOUR Dividend-Like Income Using Covered Calls
With FOUR at 72.16, 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% |
2.16 |
0.6 |
| 5% |
3.61 |
1.0 |
| 10% |
7.22 |
2.0 |
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 FOUR Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Nov 15 |
100.00 |
2.40 |
185 |
1.3 |
27.53 (38.2%) |
| Aug 16 |
100.00 |
0.75 |
94 |
0.8 |
27.53 (38.2%) |
| 5% Yield On FOUR Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Nov 15 |
100.00 |
2.40 |
185 |
1.3 |
27.53 (38.2%) |
| Aug 16 |
72.50 |
7.10 |
94 |
7.6 |
0.03 (0.0%) |
| 10% Yield On FOUR Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Nov 15 |
72.50 |
10.00 |
185 |
5.4 |
0.03 (0.0%) |
| Aug 16 |
72.50 |
7.10 |
94 |
7.6 |
0.03 (0.0%) |
Want to increase dividends with covered calls? Sign Up For A Free Trial
