GPT – Income Play

GPT now trades on a forward yield of 4.8% with distribution per unit in FY17 of $0.24

Owning GPT at $5.00 and selling long dated covered call options into March 17 at the $5.25 strike, creates $0.15 in premium. Add in the  December dividend of $0.12 and total cash flow equals $0.27. If exercised,  an additional 5% capital gain or $0.25 on top of the $0.27 takes that total return to $0.52 or 10% for 6 months exposure.

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