RPRX Dividend Type Payments
Although RPRX has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Royalty Pharma plc - Class A Ordinary Shares 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):
| Royalty Pharma plc - Class A Ordinary Shares (RPRX) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 25.34 |
25.70 |
25.70 |
+0.12 |
3.8M |
10 |
15B |
RPRX Dividend-Like Income Using Covered Calls
With RPRX at 25.70, 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% |
0.77 |
0.2 |
| 5% |
1.29 |
0.4 |
| 10% |
2.57 |
0.7 |
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 RPRX Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
27.50 |
0.15 |
36 |
0.4 |
1.80 (7.0%) |
| Jan 17 |
27.50 |
0.40 |
64 |
0.6 |
1.80 (7.0%) |
| 5% Yield On RPRX Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Dec 20 |
27.50 |
0.15 |
36 |
0.4 |
1.80 (7.0%) |
| Jan 17 |
27.50 |
0.40 |
64 |
0.6 |
1.80 (7.0%) |
| 10% Yield On RPRX Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 17 |
27.50 |
1.10 |
154 |
0.7 |
1.80 (7.0%) |
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