Shareholders of Thor Industries, Inc. (THO) looking to boost their income beyond the stock's 1.6% annualized dividend yield can sell the September covered call at the $60 strike and collect the premium based on the $2.75 bid, which annualizes to an additional 13.9% 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 $60 would be lost if the stock rises there and is called away, but THO shares would have to climb 3% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 7.7% return from this trading level, in addition to any dividends collected before the stock was called.
YieldBoost THO To 15.5% Using Options
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