RPRX Dividend
Although RPRX has a dividend of 0.21 with an ex-dividend date of May 16, you can sell covered calls on Royalty Pharma plc - Class A Ordinary Shares 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):
Royalty Pharma plc - Class A Ordinary Shares (RPRX) |
Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
28.00 |
28.92 |
28.00 |
-0.11 |
1.3M |
11 |
17B |
RPRX Dividend-Like Income Using Covered Calls
With RPRX at 28.00, 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% |
0.84 |
0.2 |
5% |
1.40 |
0.4 |
10% |
2.80 |
0.8 |
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 RPRX Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
May 17 |
30.00 |
0.15 |
22 |
0.7 |
1.08 (3.9%) |
Oct 18 |
30.00 |
1.45 |
176 |
0.8 |
1.08 (3.9%) |
5% Yield On RPRX Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
May 17 |
30.00 |
0.15 |
22 |
0.7 |
1.08 (3.9%) |
Oct 18 |
30.00 |
1.45 |
176 |
0.8 |
1.08 (3.9%) |
10% Yield On RPRX Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
Oct 18 |
30.00 |
1.45 |
176 |
0.8 |
1.08 (3.9%) |
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