PYPL Dividend Type Payments

Although PYPL has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Paypal Holdings Corp, Inc 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):

Paypal Holdings Corp, Inc (PYPL)
Bid Ask Last Change Volume P/E Market Cap
94.82 94.99 94.73 -0.29 7.7M 56 112B

PYPL Dividend-Like Income Using Covered Calls

With PYPL at 94.73, 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% 2.84 0.8
5% 4.74 1.3
10% 9.47 2.6

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 PYPL Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 22 97.00 0.06 3 2.0 2.01 (2.1%)
Mar 1 100.00 0.11 10 1.1 5.01 (5.3%)
5% Yield On PYPL Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 22 97.00 0.06 3 2.0 2.01 (2.1%)
Mar 1 99.00 0.19 10 1.9 4.01 (4.2%)
10% Yield On PYPL Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Feb 22 96.50 0.11 3 3.7 1.51 (1.6%)
Mar 1 98.00 0.34 10 3.4 3.01 (3.2%)

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