NET Dividend Type Payments
Although NET has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Cloudflare, 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 11:35 AM ET):
| Cloudflare, Inc. Class A (NET) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 174.20 |
174.30 |
174.25 |
+1.04 |
1.6M |
- |
61B |
NET Dividend-Like Income Using Covered Calls
With NET at 174.25, 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% |
5.23 |
1.4 |
| 5% |
8.71 |
2.4 |
| 10% |
17.43 |
4.8 |
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 NET Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 13 |
175.00 |
10.45 |
5 |
209.0 |
0.70 (0.4%) |
| Feb 20 |
175.00 |
11.85 |
12 |
98.8 |
0.70 (0.4%) |
| 5% Yield On NET Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 13 |
175.00 |
10.45 |
5 |
209.0 |
0.70 (0.4%) |
| Feb 20 |
175.00 |
11.85 |
12 |
98.8 |
0.70 (0.4%) |
| 10% Yield On NET Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Feb 13 |
175.00 |
10.45 |
5 |
209.0 |
0.70 (0.4%) |
| Feb 20 |
175.00 |
11.85 |
12 |
98.8 |
0.70 (0.4%) |
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