FOUR Dividend Type Payments
Although FOUR has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Shift4 Payments, 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):
| Shift4 Payments, Inc. Class A (FOUR) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 79.11 |
84.69 |
79.66 |
-0.62 |
1.9M |
27 |
7.5B |
FOUR Dividend-Like Income Using Covered Calls
With FOUR at 79.66, 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% |
2.39 |
0.7 |
| 5% |
3.98 |
1.1 |
| 10% |
7.97 |
2.2 |
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 FOUR Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
100.00 |
0.30 |
19 |
1.6 |
15.31 (19.2%) |
| Oct 17 |
100.00 |
4.10 |
173 |
2.4 |
15.31 (19.2%) |
| 5% Yield On FOUR Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
100.00 |
0.30 |
19 |
1.6 |
15.31 (19.2%) |
| Oct 17 |
100.00 |
4.10 |
173 |
2.4 |
15.31 (19.2%) |
| 10% Yield On FOUR Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| May 16 |
85.00 |
2.70 |
19 |
14.2 |
0.31 (0.4%) |
| Oct 17 |
100.00 |
4.10 |
173 |
2.4 |
15.31 (19.2%) |
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