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 Tue 4:16 PM ET):

MODEL N INC (MODN)
Bid Ask Last Change Volume P/E Market Cap
15.12 16.00 15.12 -0.42 131K - 0.5B

MODN Dividend-Like Income Using Covered Calls

With MODN at 15.12, 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% 0.45 0.1
5% 0.76 0.2
10% 1.51 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 17.00 0.15 25 0.6 1.00 (6.6%)
Dec 21 16.00 0.15 60 0.3 0.00 (0.0%)
5% Yield On MODN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 17.00 0.15 25 0.6 1.00 (6.6%)
Dec 21 16.00 0.15 60 0.3 0.00 (0.0%)
10% Yield On MODN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 17.00 0.15 25 0.6 1.00 (6.6%)
Feb 15 17.00 0.60 116 0.5 1.00 (6.6%)

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