SLP Dividend
Although SLP has a dividend of 0.06 with an ex-dividend date of Apr 26, you can sell covered calls on Simulations Plus, Inc. to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 4:16 PM ET):
| Simulations Plus, Inc. (SLP) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 42.00 |
50.00 |
44.41 |
-0.29 |
93K |
86 |
0.9B |
SLP Dividend-Like Income Using Covered Calls
With SLP at 44.41, 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% |
1.33 |
0.4 |
| 5% |
2.22 |
0.6 |
| 10% |
4.44 |
1.2 |
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 SLP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jun 21 |
50.00 |
0.75 |
65 |
1.2 |
0.00 (0.0%) |
| Sep 20 |
50.00 |
2.55 |
156 |
1.6 |
0.00 (0.0%) |
| 5% Yield On SLP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Jun 21 |
50.00 |
0.75 |
65 |
1.2 |
0.00 (0.0%) |
| Sep 20 |
50.00 |
2.55 |
156 |
1.6 |
0.00 (0.0%) |
| 10% Yield On SLP Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Sep 20 |
50.00 |
2.55 |
156 |
1.6 |
0.00 (0.0%) |
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