GOLD Dividend Type Payments

RANDGOLD RESOURCES dividend

Although GOLD has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on RANDGOLD RESOURCES 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):

RANDGOLD RESOURCES (GOLD)
Bid Ask Last Change Volume P/E Market Cap
64.50 65.00 64.50 +1.71 1.3M 25 6.0B

GOLD Dividend-Like Income Using Covered Calls

With GOLD at 64.50, 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% 1.94 0.5
5% 3.23 0.9
10% 6.45 1.8

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 GOLD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 70.00 0.35 36 1.0 5.00 (7.8%)
Dec 21 77.50 0.90 127 0.7 12.50 (19.4%)
5% Yield On GOLD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 70.00 0.35 36 1.0 5.00 (7.8%)
Dec 21 75.00 1.20 127 0.9 10.00 (15.5%)
10% Yield On GOLD Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Sep 21 67.50 0.80 36 2.2 2.50 (3.9%)
Dec 21 70.00 2.25 127 1.8 5.00 (7.8%)

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