GOL Linhas Aereas, (GOL)- A Brazilian Growth Stock With High Put Option Yields

By Robert Hauver

GOL Linhas Aereas Inteligentes, (GOL), is a new addition to our Covered Put Tables, and currently has the highest annualized put yield at over 26%. GOL is a low-cost, low-fare regional airline, (the biggest in Latin America), with routes connecting all of Brazil’s cities and from Brazil to cities in South America and many Caribbean destinations.

GOL is seeking government approval for a code-sharing program with Delta, which would initially allow Delta to sell tickets on more than 45 GOL flights within Brazil. The deal also will cover two GOL flights between Brazil and Paraguay and Uruguay.

This undervalued dividend paying stock appears to be a good way to play internal growth in Brazil.

GOL soars above its regional airline industry peers in our Industry Comparison Table:

GOL Airline Industry
PEG .44 1.79
PE 6.1 18
Profit Margin 14.78% -1.24%
Long-Term EPS Growth 11.00% 4.00%
Long-Term Revenue Growth 21% 2.00%
ROE 48.39% - 6.14%

GOL closed Friday at $13.08, and recently paid an annual dividend of $.398/US ADR, which equals a 2.98% dividend yield.  (Many financial websites are incorrectly listing GOL’s yield as over 12%, but the $.39 is not a quarterly payout).

However, you can still earn over 12% right now, by selling October $12.50 put options for GOL, (GOL10V1612.5), which closed at $1.60 on Friday, for a 12.8% nominal yield, or 26.16% annualized.

Disclosure: Author is short GOL puts.

Disclaimer: This article is written for informational purposes only.