Shareholders of Universal Health Realty Income Trust (UHT) looking to boost their income beyond the stock's 5.4% annualized dividend yield can sell the December covered call at the $50 strike and collect the premium based on the $1.95 bid, which annualizes to an additional 10.1% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 15.5% annualized rate in the scenario where the stock is not called away. Any upside above $50 would be lost if the stock rises there and is called away, but UHT shares would have to climb 7% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 11.2% return from this trading level, in addition to any dividends collected before the stock was called.
YieldBoost Universal Health Realty Income Trust From 5.4% To 15.5%
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