GPS Dividend Type Payments

GAP dividend

Although GPS has no upcoming (meaning, Board-approved and announced) dividends, 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 Tue 10:50 AM ET):

GAP (GPS)
Bid Ask Last Change Volume P/E Market Cap
26.93 26.94 26.94 -0.18 596K 12 10B

GPS Dividend-Like Income Using Covered Calls

With GPS at 26.94, 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% 0.81 0.2
5% 1.35 0.4
10% 2.69 0.7

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
Oct 19 29.50 0.01 4 0.3 2.56 (9.5%)
Oct 26 29.50 0.03 11 0.3 2.56 (9.5%)
5% Yield On GPS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 29.00 0.02 4 0.5 2.06 (7.6%)
Oct 26 29.00 0.07 11 0.6 2.06 (7.6%)
10% Yield On GPS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Oct 19 28.00 0.07 4 1.8 1.06 (3.9%)
Oct 26 28.50 0.13 11 1.2 1.56 (5.8%)

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Want more examples? GPRO Dividend | GPT Dividend