GPS Dividend

GAP dividend

Although GPS has a dividend of 0.24 with an ex-dividend date of Jul 10, you can sell covered calls on GAP 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):

GAP (GPS)
Bid Ask Last Change Volume P/E Market Cap
33.31 33.40 33.39 -0.36 6.7M 15 13B

GPS Dividend-Like Income Using Covered Calls

With GPS at 33.39, 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% 1.00 0.3
5% 1.67 0.5
10% 3.34 0.9

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 GPS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 29 35.50 0.04 8 0.5 2.10 (6.3%)
Jul 6 36.00 0.06 15 0.4 2.60 (7.8%)
5% Yield On GPS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 29 35.50 0.04 8 0.5 2.10 (6.3%)
Jul 6 35.50 0.11 15 0.7 2.10 (6.3%)
10% Yield On GPS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jun 29 35.00 0.08 8 1.0 1.60 (4.8%)
Jul 6 35.00 0.19 15 1.3 1.60 (4.8%)

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Top 10 Open Interest For Jul 20 Expiration     Top 5 High Yield
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5.MU dividend 10.QQQ dividend   5.PCG dividend

Want more examples? GPRO Dividend | GPT Dividend