Shareholders of US Silica Holdings, Inc. (SLCA) looking to boost their income beyond the stock's 2.2% annualized dividend yield can sell the December covered call at the $25 strike and collect the premium based on the $2.20 bid, which annualizes to an additional 17.1% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 19.4% annualized rate in the scenario where the stock is not called away. Any upside above $25 would be lost if the stock rises there and is called away, but SLCA shares would have to advance 10.5% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 20.2% return from this trading level, in addition to any dividends collected before the stock was called.
YieldBoost SLCA To 19.4%
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