Strategy To YieldBoost ATKR From 1.8% To 11.4% Using Options

Shareholders of Atkore Inc (ATKR) looking to boost their income beyond the stock's 1.8% annualized dividend yield can sell the December covered call at the $90 strike and collect the premium based on the $5.70 bid, which annualizes to an additional 9.6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 11.4% annualized rate in the scenario where the stock is not called away. Any upside above $90 would be lost if the stock rises there and is called away, but ATKR shares would have to advance 28.3% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 36.5% return from this trading level, in addition to any dividends collected before the stock was called.