Today, I am
adding to Darden Restaurants, symbol DRI to make 6.93% of income.
PROCEEDS
FROM KMB
I am using proceeds from Kimberly Clark, symbol KMB,
to add to my position in DRI. I have
loved owning KMB but my theory, as you know, is there is always another stock
to buy and I really want more than just three percent income. Therefore, I cashed in my gains by setting a
stop on KMB stock at $100. The stock
price hit the stop price earlier this week so I have profit to invest.
SELECT
A DIVIDEND MACHINE FOR SAFETY
I am leery of this stock market so I selected a
dividend machine that currently pays 3.79%.
My original buy on DRI was about $45.00/share. Today I bought at $52.66 and immediately sold
a call for a premium of $1.65.
If I sell DRI at the strike price of $55.00, I will
gain 7.58%. No matter what, I get to
keep the $1.65 per share from selling the call and that is a yield of
3.13%. If I hold DRI for one year and
the stock price goes nowhere, my income will be a mighty $1.65 per share from
the call premium plus $2.00 per share from the dividend.
EARN
6.93% INCOME FROM DRI
DIVIDEND STOCK
|
|
Darden
|
DRI
|
Call Option
|
Oct. 55
|
Cost Basis
|
$ 52.66
|
Strike Price
|
$ 55.00
|
Call Premium
|
$ 1.65
|
Premium Yld
|
3.13%
|
Total Return
|
7.58%
|
Where else can I get a 6.93% yield on a stock I
consider safe. See the covered call table below for details on the covered call income.
Add the dividend to the call income and you get nearly seven percent income.
TheMoneyMadam
