IAC Dividend Type Payments

Although IAC has no upcoming (meaning, Board-approved and announced) dividends, you can sell covered calls on IAC/INTERACTIVECORP COMMON 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):

IAC/INTERACTIVECORP COMMON (IAC)
Bid Ask Last Change Volume P/E Market Cap
166.68 225.46 195.64 -5.43 604K 33 17B

IAC Dividend-Like Income Using Covered Calls

With IAC at 195.64, 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% 5.87 1.6
5% 9.78 2.7
10% 19.56 5.4

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 IAC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 230.00 0.95 29 3.3 4.54 (2.3%)
Dec 21 240.00 1.40 64 2.2 14.54 (7.4%)
5% Yield On IAC Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Nov 16 230.00 0.95 29 3.3 4.54 (2.3%)
Dec 21 230.00 2.50 64 3.9 4.54 (2.3%)

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