Shareholders of Robert Half International Inc. (RHI) looking to boost their income beyond the stock's 1.9% annualized dividend yield can sell the December covered call at the $40 strike and collect the premium based on the $1.05 bid, which annualizes to an additional 6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 7.9% annualized rate in the scenario where the stock is not called away. Any upside above $40 would be lost if the stock rises there and is called away, but RHI shares would have to advance 16.4% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 19.4% return from this trading level, in addition to any dividends collected before the stock was called.
How To YieldBoost Robert Half International From 1.9% To 7.9%
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