DRI Dividend

Darden Restaurants, Inc. dividend

Although DRI has a dividend of 1.50 with an ex-dividend date of Jul 10, 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 4:16 PM ET):

Darden Restaurants, Inc. (DRI)
Bid Ask Last Change Volume P/E Market Cap
219.05 220.25 220.27 +0.94 605K 25 26B

DRI Dividend-Like Income Using Covered Calls

With DRI at 220.27, 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% 6.61 1.8
5% 11.01 3.0
10% 22.03 6.0

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 15 220.00 5.80 44 12.6 0.00 (0.0%)
Oct 17 220.00 11.60 107 10.6 0.00 (0.0%)
5% Yield On DRI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 220.00 5.80 44 12.6 0.00 (0.0%)
Oct 17 220.00 11.60 107 10.6 0.00 (0.0%)
10% Yield On DRI Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Aug 15 220.00 5.80 44 12.6 0.00 (0.0%)
Oct 17 220.00 11.60 107 10.6 0.00 (0.0%)

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