VNDA Dividend Type Payments

VANDA PHARMACEUTICALS dividend

Although VNDA has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on VANDA PHARMACEUTICALS 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):

VANDA PHARMACEUTICALS (VNDA)
Bid Ask Last Change Volume P/E Market Cap
21.50 24.85 21.85 -0.20 490K 1103 1.2B

VNDA Dividend-Like Income Using Covered Calls

With VNDA at 21.85, 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% 0.66 0.2
5% 1.09 0.3
10% 2.19 0.6

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 VNDA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 25.00 0.10 36 0.3 0.15 (0.7%)
Dec 21 27.00 0.60 127 0.5 2.15 (9.8%)
5% Yield On VNDA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 27.00 0.60 127 0.5 2.15 (9.8%)
Mar 15 29.00 0.80 211 0.4 4.15 (19.0%)
10% Yield On VNDA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 21 26.00 0.80 127 0.6 1.15 (5.3%)
Mar 15 26.00 1.45 211 0.7 1.15 (5.3%)

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