KTOS Dividend Type Payments

Although KTOS has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Kratos Defense & Security Solutions, Inc. 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):

Kratos Defense & Security Solutions, Inc. (KTOS)
Bid	Ask	Last	Change	Volume	P/E	Market Cap
17.29	18.24	17.61	-0.14	688K	-	2.3B

KTOS Dividend-Like Income Using Covered Calls

With KTOS at 17.61, 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%	0.53	0.1
5%	0.88	0.2
10%	1.76	0.5

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 KTOS Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 17	20.00	0.55	30	1.8	1.76 (10.0%)
Jun 21	20.00	0.80	65	1.2	1.76 (10.0%)

5% Yield On KTOS Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 17	20.00	0.55	30	1.8	1.76 (10.0%)
Jun 21	20.00	0.80	65	1.2	1.76 (10.0%)

10% Yield On KTOS Using Covered Calls
Expiration	Strike	Call Bid	Days	Cents/Day	Upside Potential
May 17	20.00	0.55	30	1.8	1.76 (10.0%)
Jun 21	20.00	0.80	65	1.2	1.76 (10.0%)

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