WHD Dividend
Although WHD has a dividend of 0.13 with an ex-dividend date of Mar 3, you can sell covered calls on Cactus, 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 Tue 4:16 PM ET):
| Cactus, Inc. Class A (WHD) |
|---|
| Bid |
Ask |
Last |
Change |
Volume |
P/E |
Market Cap |
| 57.00 |
59.30 |
57.46 |
-1.02 |
864K |
21 |
4.7B |
WHD Dividend-Like Income Using Covered Calls
With WHD at 57.46, 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% |
1.72 |
0.5 |
| 5% |
2.87 |
0.8 |
| 10% |
5.75 |
1.6 |
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 WHD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
60.00 |
4.20 |
172 |
2.4 |
0.70 (1.2%) |
| May 16 |
60.00 |
2.50 |
81 |
3.1 |
0.70 (1.2%) |
| 5% Yield On WHD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
60.00 |
4.20 |
172 |
2.4 |
0.70 (1.2%) |
| May 16 |
60.00 |
2.50 |
81 |
3.1 |
0.70 (1.2%) |
| 10% Yield On WHD Using Covered Calls |
|---|
| Expiration |
Strike |
Call Bid |
Days |
Cents/Day |
Upside Potential |
| Aug 15 |
60.00 |
4.20 |
172 |
2.4 |
0.70 (1.2%) |
| May 16 |
60.00 |
2.50 |
81 |
3.1 |
0.70 (1.2%) |
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