GRMN Dividend

Garmin Ltd. dividend

Although GRMN has a dividend of 0.90 with an ex-dividend date of Dec 12, 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 Wed 4:16 PM ET):

Garmin Ltd. (GRMN)
Bid Ask Last Change Volume P/E Market Cap
182.46 191.76 189.62 -0.23 803K 23 37B

GRMN Dividend-Like Income Using Covered Calls

With GRMN at 189.62, here's a table showing how big the annual "dividend" (i.e. 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% 5.69 1.6
5% 9.48 2.6
10% 18.96 5.2

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
Dec 19 195.00 3.50 31 11.3 3.24 (1.7%)
Nov 21 195.00 0.20 3 6.7 3.24 (1.7%)
5% Yield On GRMN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 19 195.00 3.50 31 11.3 3.24 (1.7%)
Nov 21 195.00 0.20 3 6.7 3.24 (1.7%)
10% Yield On GRMN Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Dec 19 195.00 3.50 31 11.3 3.24 (1.7%)
Nov 21 195.00 0.20 3 6.7 3.24 (1.7%)

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