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 Mon 4:16 PM ET):
| Shift4 Payments, Inc. Class A (FOUR) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 81.70 |
84.48 |
82.98 |
+1.37 |
2.6M |
30 |
7.2B |
FOUR Dividend-Like Income Using Covered Calls
With FOUR at 82.98, 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% |
2.49 |
0.7 |
| 5% |
4.15 |
1.1 |
| 10% |
8.30 |
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 FOUR Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
85.00 |
0.65 |
5 |
13.0 |
0.52 (0.6%) |
| Oct 17 |
100.00 |
0.75 |
68 |
1.1 |
15.52 (18.7%) |
| 5% Yield On FOUR Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
85.00 |
0.65 |
5 |
13.0 |
0.52 (0.6%) |
| Oct 17 |
85.00 |
4.50 |
68 |
6.6 |
0.52 (0.6%) |
| 10% Yield On FOUR Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
85.00 |
0.65 |
5 |
13.0 |
0.52 (0.6%) |
| Oct 17 |
85.00 |
4.50 |
68 |
6.6 |
0.52 (0.6%) |
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