Shareholders of J&J Snack Foods Corp. (JJSF) looking to boost their income beyond the stock's 0.8% annualized dividend yield can sell the December covered call at the $80 strike and collect the premium based on the $2.85 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 10.9% annualized rate in the scenario where the stock is not called away. Any upside above $80 would be lost if the stock rises there and is called away, but JJSF shares would have to advance 1.2% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 4.8% return from this trading level, in addition to any dividends collected before the stock was called.
How To YieldBoost J&J Snack Foods Corp. To 10.9%
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