NTES Dividend

NetEase, Inc. - American Depositary Shares, each representing 5 ordinary dividend

Although NTES has a dividend of 0.44 with an ex-dividend date of Nov 29, you can sell covered calls on NetEase, Inc. - American Depositary Shares, each representing 5 ordinary 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):

NetEase, Inc. - American Depositary Shares, each representing 5 ordinary (NTES)
Bid Ask Last Change Volume P/E Market Cap
84.17 85.88 85.49 +1.27 2.0M 70 51B

NTES Dividend-Like Income Using Covered Calls

With NTES at 85.49, 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% 2.56 0.7
5% 4.27 1.2
10% 8.55 2.3

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 NTES Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 6 86.00 0.55 22 2.5 0.12 (0.1%)
Dec 13 86.00 3.10 29 10.7 0.12 (0.1%)
5% Yield On NTES Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 6 86.00 0.55 22 2.5 0.12 (0.1%)
Dec 13 86.00 3.10 29 10.7 0.12 (0.1%)
10% Yield On NTES Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 6 86.00 0.55 22 2.5 0.12 (0.1%)
Dec 13 86.00 3.10 29 10.7 0.12 (0.1%)

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