XP Dividend Type Payments
Although XP has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on XP 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 Fri 4:16 PM ET):
XP Inc. - Class A (XP) |
Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
21.67 |
22.80 |
21.67 |
-0.26 |
3.7M |
- |
12B |
XP Dividend-Like Income Using Covered Calls
With XP at 21.67, 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% |
0.65 |
0.2 |
5% |
1.08 |
0.3 |
10% |
2.17 |
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 XP Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
Nov 15 |
23.00 |
0.79 |
183 |
0.4 |
0.20 (0.9%) |
Aug 16 |
25.00 |
0.61 |
92 |
0.7 |
2.20 (10.2%) |
5% Yield On XP Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
Nov 15 |
23.00 |
0.79 |
183 |
0.4 |
0.20 (0.9%) |
Aug 16 |
25.00 |
0.61 |
92 |
0.7 |
2.20 (10.2%) |
10% Yield On XP Using Covered Calls |
Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
Aug 16 |
25.00 |
0.61 |
92 |
0.7 |
2.20 (10.2%) |
May 24 |
23.00 |
0.11 |
8 |
1.4 |
0.20 (0.9%) |
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