Back on 12MAR15 I introduced you to Archer Danial Midland (ADM), a company with a huge tailwind behind it in the form of Chinese and Indian demographics. I’m going back to that theme today with General Mills, Inc. (GIS). See, over the next couple of decades about a billion people in China and India will enter the middle class. They will eat more processed and convenience foods, especially when they are in a rush in the morning to get to their now less agricultural jobs in the city. General Mills stands to open up a huge new market with good margins. The company is attractively priced versus its peers and has raised its dividend distribution for 11 consecutive years. It yields 3.15% at today’s price.
I am writing GIS150515P00055000 with the hope of getting assigned shares. Upon assignment, I will repeatedly go one month out on expiries and write a call about 10% out of the money. This should boost annualized returns by about 2% (more than 60% higher than relying on dividends alone!) while allowing me to capture upside price appreciation as the company slowly but surely gains a foothold with the new eastern middle class. I received 1.30 per contract, making for a 19.17% annualized yield over 45 days on this safe and stable blue chip. Tasty!
Devour your prey raptors!