Shareholders of Carriage Services, Inc. (CSV) looking to boost their income beyond the stock's 0.5% annualized dividend yield can sell the April 2014 covered call at the $22.50 strike and collect the premium based on the $1.00 bid, which annualizes to an additional 10.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 10.8% annualized rate in the scenario where the stock is not called away. Any upside above $22.50 would be lost if the stock rises there and is called away, but CSV shares would have to advance 11.6% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 16.6% return from this trading level, in addition to any dividends collected before the stock was called.
YieldBoost Carriage Services To 10.8% Using Options
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