STMP Dividend Type Payments

STAMPS.COM dividend

Although STMP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on STAMPS.COM 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):

STAMPS.COM (STMP)
Bid Ask Last Change Volume P/E Market Cap
225.00 234.00 231.70 -3.45 220K 23 4.3B

STMP Dividend-Like Income Using Covered Calls

With STMP at 231.70, 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% 6.95 1.9
5% 11.59 3.2
10% 23.17 6.3

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 STMP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 250.00 0.45 8 5.6 16.00 (6.9%)
Aug 31 255.00 0.35 15 2.3 21.00 (9.1%)
5% Yield On STMP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 250.00 0.45 8 5.6 16.00 (6.9%)
Aug 31 250.00 0.90 15 6.0 16.00 (6.9%)
10% Yield On STMP Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 24 245.00 0.60 8 7.5 11.00 (4.7%)
Aug 31 247.50 3.00 15 20.0 13.50 (5.8%)

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