SPSC Dividend Type Payments

SPS Commerce, Inc dividend

Although SPSC has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on SPS Commerce, 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):

SPS Commerce, Inc (SPSC)
Bid Ask Last Change Volume P/E Market Cap
108.22 108.01 108.01 -0.28 121K 80 1.9B

SPSC Dividend-Like Income Using Covered Calls

With SPSC at 108.01, 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% 3.24 0.9
5% 5.40 1.5
10% 10.80 3.0

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 SPSC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 115.00 0.65 30 2.2 6.99 (6.5%)
May 17 125.00 1.05 59 1.8 16.99 (15.7%)
5% Yield On SPSC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 115.00 0.65 30 2.2 6.99 (6.5%)
May 17 125.00 1.05 59 1.8 16.99 (15.7%)
10% Yield On SPSC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Apr 18 110.00 2.20 30 7.3 1.99 (1.8%)
May 17 120.00 2.00 59 3.4 11.99 (11.1%)

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