GRMN Dividend

Garmin Ltd dividend

Although GRMN has a dividend of 0.57 with an ex-dividend date of Sep 13, you can sell covered calls on Garmin Ltd to create 12 extra dividend type payments per year to boost its yield. Let's look at some recent prices (last updated Tue 12:25 PM ET):

Garmin Ltd (GRMN)
Bid Ask Last Change Volume P/E Market Cap
80.54 80.56 80.56 +0.73 344K 22 15B

GRMN Dividend-Like Income Using Covered Calls

With GRMN at 80.56, 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% 2.42 0.7
5% 4.03 1.1
10% 8.06 2.2

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 GRMN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 19 82.00 0.05 4 1.3 1.44 (1.8%)
Jul 26 82.50 0.14 11 1.3 1.94 (2.4%)
5% Yield On GRMN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 19 82.00 0.05 4 1.3 1.44 (1.8%)
Jul 26 82.50 0.14 11 1.3 1.94 (2.4%)
10% Yield On GRMN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jul 19 81.50 0.13 4 3.3 0.94 (1.2%)
Jul 26 81.50 0.39 11 3.5 0.94 (1.2%)

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