DRI Dividend Type Payments

Darden Restaurants, Inc dividend

Although DRI has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on Darden Restaurants, Inc to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Thu 11:05 AM ET):

Darden Restaurants, Inc (DRI)
Bid Ask Last Change Volume P/E Market Cap
123.34 123.43 123.42 +1.21 124K 23 15B

DRI Dividend-Like Income Using Covered Calls

With DRI at 123.42, here's a table showing how big the annual "dividend" (ie. 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% 3.70 1.0
5% 6.17 1.7
10% 12.34 3.4

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 DRI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 16 130.00 0.55 30 1.8 6.57 (5.3%)
Oct 18 135.00 1.50 93 1.6 11.57 (9.4%)
5% Yield On DRI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 16 130.00 0.55 30 1.8 6.57 (5.3%)
Oct 18 130.00 2.75 93 3.0 6.57 (5.3%)
10% Yield On DRI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 16 125.00 1.90 30 6.3 1.57 (1.3%)
Oct 18 125.00 4.70 93 5.1 1.57 (1.3%)

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