STNE Dividend Type Payments
Although STNE has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on StoneCo Ltd. - Class A Common Share 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):
| StoneCo Ltd. - Class A Common Share (STNE) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 9.10 |
9.24 |
9.25 |
-0.16 |
32.5M |
8.0 |
3.0B |
STNE Dividend-Like Income Using Covered Calls
With STNE at 9.25, 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% |
0.28 |
0.1 |
| 5% |
0.46 |
0.1 |
| 10% |
0.93 |
0.3 |
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 STNE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 4 |
10.00 |
0.40 |
36 |
1.1 |
0.76 (8.2%) |
| Mar 7 |
9.50 |
0.10 |
8 |
1.3 |
0.26 (2.8%) |
| 5% Yield On STNE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 4 |
10.00 |
0.40 |
36 |
1.1 |
0.76 (8.2%) |
| Mar 7 |
9.50 |
0.10 |
8 |
1.3 |
0.26 (2.8%) |
| 10% Yield On STNE Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Apr 4 |
10.00 |
0.40 |
36 |
1.1 |
0.76 (8.2%) |
| Mar 7 |
9.50 |
0.10 |
8 |
1.3 |
0.26 (2.8%) |
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