WHD Dividend
Although WHD has a dividend of 0.14 with an ex-dividend date of Dec 1, you can sell covered calls on Cactus, Inc. Class A to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Mon 4:16 PM ET):
| Cactus, Inc. Class A (WHD) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 42.20 |
46.12 |
44.37 |
+0.20 |
634K |
18 |
3.5B |
WHD Dividend-Like Income Using Covered Calls
With WHD at 44.37, 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 WHD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
50.00 |
0.40 |
47 |
0.9 |
3.88 (8.7%) |
| May 15 |
50.00 |
2.85 |
194 |
1.5 |
3.88 (8.7%) |
| 5% Yield On WHD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 19 |
50.00 |
0.40 |
47 |
0.9 |
3.88 (8.7%) |
| May 15 |
50.00 |
2.85 |
194 |
1.5 |
3.88 (8.7%) |
| 10% Yield On WHD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 15 |
50.00 |
2.85 |
194 |
1.5 |
3.88 (8.7%) |
| Feb 20 |
50.00 |
1.40 |
110 |
1.3 |
3.88 (8.7%) |
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