WHD Dividend Type Payments

Although WHD has no upcoming (meaning, Board-approved and announced) dividends, 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 Wed 4:16 PM ET):

Cactus, Inc. Class A (WHD)
Bid Ask Last Change Volume P/E Market Cap
43.41 45.84 45.84 -0.31 415K 16 3.7B

WHD Dividend-Like Income Using Covered Calls

With WHD at 45.84, 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% 1.38 0.4
5% 2.29 0.6
10% 4.58 1.3

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 WHD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 50.00 0.45 38 1.2 4.16 (9.1%)
Jul 18 50.00 0.05 10 0.5 4.16 (9.1%)
5% Yield On WHD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 50.00 0.45 38 1.2 4.16 (9.1%)
Nov 21 50.00 2.15 136 1.6 4.16 (9.1%)
10% Yield On WHD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 21 50.00 2.15 136 1.6 4.16 (9.1%)
Feb 20 50.00 3.30 227 1.5 4.16 (9.1%)

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