NTES Dividend Type Payments

NetEase, Inc. - American Depositary Shares, each representing 5 ordinary dividend

Although NTES has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on NetEase, Inc. - American Depositary Shares, each representing 5 ordinary to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 4:16 PM ET):

NetEase, Inc. - American Depositary Shares, each representing 5 ordinary (NTES)
Bid Ask Last Change Volume P/E Market Cap
131.03 133.50 132.61 -0.52 512K 96 81B

NTES Dividend-Like Income Using Covered Calls

With NTES at 132.61, 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% 3.98 1.1
5% 6.63 1.8
10% 13.26 3.6

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 NTES Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 135.00 4.50 31 14.5 1.50 (1.1%)
Jul 18 135.00 0.50 3 16.7 1.50 (1.1%)
5% Yield On NTES Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 135.00 4.50 31 14.5 1.50 (1.1%)
Jul 18 135.00 0.50 3 16.7 1.50 (1.1%)
10% Yield On NTES Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 135.00 4.50 31 14.5 1.50 (1.1%)
Jul 18 135.00 0.50 3 16.7 1.50 (1.1%)

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