BABA Dividend Type Payments

Alibaba Group Holding Limited American Depositary Shares each representi dividend

Although BABA has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Alibaba Group Holding Limited American Depositary Shares each representi to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Wed 10:05 AM ET):

Alibaba Group Holding Limited American Depositary Shares each representi (BABA)
Bid Ask Last Change Volume P/E Market Cap
86.40 86.42 86.40 -0.75 1.7M 139 236B

BABA Dividend-Like Income Using Covered Calls

With BABA at 86.40, 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% 2.59 0.7
5% 4.32 1.2
10% 8.64 2.4

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 BABA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 20 86.00 1.25 3 27.7 0.00 (0.0%)
Dec 27 100.00 0.10 10 1.0 13.58 (15.7%)
5% Yield On BABA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 20 86.00 1.25 3 27.7 0.00 (0.0%)
Dec 27 86.00 1.93 10 15.1 0.00 (0.0%)
10% Yield On BABA Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 20 86.00 1.25 3 27.7 0.00 (0.0%)
Dec 27 86.00 1.93 10 15.1 0.00 (0.0%)

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Want more examples? BAB Dividend | BAC Dividend