YieldBoost KIM From 4.5% To 15.2% Using Options

Shareholders of Kimco Realty Corp (KIM) looking to boost their income beyond the stock's 4.5% annualized dividend yield can sell the July covered call at the $22.50 strike and collect the premium based on the $1.00 bid, which annualizes to an additional 10.6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 15.2% annualized rate in the scenario where the stock is not called away. Any upside above $22.50 would be lost if the stock rises there and is called away, but KIM shares would have to advance 2.1% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 6.7% return from this trading level, in addition to any dividends collected before the stock was called.