MODN Dividend Type Payments

Model N, Inc dividend

Although MODN has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Model N, Inc to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Fri 2:05 PM ET):

Model N, Inc (MODN)
Bid Ask Last Change Volume P/E Market Cap
17.04 17.07 17.05 -0.05 189K - 0.5B

MODN Dividend-Like Income Using Covered Calls

With MODN at 17.05, here's a table showing how big the annual "dividend" (ie. 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% 0.51 0.1
5% 0.85 0.2
10% 1.71 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 MODN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 18.00 0.10 22 0.5 0.93 (5.5%)
Apr 18 19.00 0.10 56 0.2 1.93 (11.3%)
5% Yield On MODN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 18.00 0.10 22 0.5 0.93 (5.5%)
Apr 18 18.00 0.30 56 0.5 0.93 (5.5%)
10% Yield On MODN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Mar 15 17.00 0.40 22 1.5 0.00 (0.0%)
Apr 18 18.00 0.30 56 0.5 0.93 (5.5%)

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