GIS Dividend

General Mills, Inc. dividend

Although GIS has a dividend of 0.60 with an ex-dividend date of Jan 10, you can sell covered calls on General Mills, Inc. 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):

General Mills, Inc. (GIS)
Bid Ask Last Change Volume P/E Market Cap
63.28 63.89 63.61 -0.40 9.9M 15 71B

GIS Dividend-Like Income Using Covered Calls

With GIS at 63.61, 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% 1.91 0.5
5% 3.18 0.9
10% 6.36 1.7

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 GIS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 17 65.00 0.55 29 1.9 1.11 (1.7%)
Apr 17 65.00 2.25 119 1.9 1.11 (1.7%)
5% Yield On GIS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 17 65.00 0.55 29 1.9 1.11 (1.7%)
Apr 17 65.00 2.25 119 1.9 1.11 (1.7%)
10% Yield On GIS Using Covered Calls
Expiration Strike Call Bid Days Cents/Day Upside Potential
Jan 17 65.00 0.55 29 1.9 1.11 (1.7%)
Apr 17 65.00 2.25 119 1.9 1.11 (1.7%)

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