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 Fri 4:16 PM ET):
| Cloudflare, Inc. Class A (NET) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 230.50 |
232.81 |
232.81 |
+6.91 |
2.8M |
- |
79B |
NET Dividend-Like Income Using Covered Calls
With NET at 232.81, 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% |
6.98 |
1.9 |
| 5% |
11.64 |
3.2 |
| 10% |
23.28 |
6.4 |
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 NET Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
235.00 |
12.05 |
29 |
41.6 |
2.19 (0.9%) |
| Dec 12 |
235.00 |
12.85 |
36 |
35.7 |
2.19 (0.9%) |
| 5% Yield On NET Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
235.00 |
12.05 |
29 |
41.6 |
2.19 (0.9%) |
| Dec 12 |
235.00 |
12.85 |
36 |
35.7 |
2.19 (0.9%) |
| 10% Yield On NET Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
235.00 |
12.05 |
29 |
41.6 |
2.19 (0.9%) |
| Dec 12 |
235.00 |
12.85 |
36 |
35.7 |
2.19 (0.9%) |
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