SHOP Dividend Type Payments
Although SHOP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Shopify Inc. - Class A Subordinate Voting 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):
| Shopify Inc. - Class A Subordinate Voting Shares (SHOP) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 152.46 |
154.31 |
152.41 |
-3.64 |
10.1M |
116 |
203B |
SHOP Dividend-Like Income Using Covered Calls
With SHOP at 152.41, 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% |
4.57 |
1.3 |
| 5% |
7.62 |
2.1 |
| 10% |
15.24 |
4.2 |
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 SHOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
155.00 |
7.45 |
29 |
25.7 |
0.69 (0.5%) |
| Dec 12 |
155.00 |
8.15 |
36 |
22.6 |
0.69 (0.5%) |
| 5% Yield On SHOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
155.00 |
7.45 |
29 |
25.7 |
0.69 (0.5%) |
| Dec 12 |
155.00 |
8.15 |
36 |
22.6 |
0.69 (0.5%) |
| 10% Yield On SHOP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 5 |
155.00 |
7.45 |
29 |
25.7 |
0.69 (0.5%) |
| Dec 12 |
155.00 |
8.15 |
36 |
22.6 |
0.69 (0.5%) |
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