Strategy To YieldBoost CNXC To 28.8% Using Options

Shareholders of Concentrix Corp (CNXC) looking to boost their income beyond the stock's 2% annualized dividend yield can sell the July covered call at the $65 strike and collect the premium based on the $5.40 bid, which annualizes to an additional 26.9% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 28.8% annualized rate in the scenario where the stock is not called away. Any upside above $65 would be lost if the stock rises there and is called away, but CNXC shares would have to climb 7.2% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 16.1% return from this trading level, in addition to any dividends collected before the stock was called.