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 4:16 PM ET):

MODEL N INC (MODN)
Bid Ask Last Change Volume P/E Market Cap
15.95 17.70 16.05 -0.10 113K - 0.5B

MODN Dividend-Like Income Using Covered Calls

With MODN at 16.05, 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% 0.48 0.1
5% 0.80 0.2
10% 1.61 0.4

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
Nov 16 19.00 0.20 92 0.2 1.30 (8.1%)
Feb 15 21.00 0.25 183 0.1 3.30 (20.6%)
5% Yield On MODN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 18.00 0.40 92 0.4 0.30 (1.9%)
Feb 15 19.00 0.60 183 0.3 1.30 (8.1%)
10% Yield On MODN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 15 18.00 0.90 183 0.5 0.30 (1.9%)

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