GDDY Dividend Type Payments

Although GDDY has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on GODADDY INC 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):

GODADDY INC (GDDY)
Bid Ask Last Change Volume P/E Market Cap
71.84 75.07 74.80 -1.51 783K 65 13B

GDDY Dividend-Like Income Using Covered Calls

With GDDY at 74.80, 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% 2.24 0.6
5% 3.74 1.0
10% 7.48 2.0

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 GDDY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 87.50 0.20 29 0.7 12.43 (16.6%)
Dec 21 90.00 0.40 64 0.6 14.93 (20.0%)
5% Yield On GDDY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 85.00 0.40 29 1.4 9.93 (13.3%)
Dec 21 85.00 1.00 64 1.6 9.93 (13.3%)
10% Yield On GDDY Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 82.50 0.75 29 2.6 7.43 (9.9%)
Dec 21 82.50 1.55 64 2.4 7.43 (9.9%)

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