YieldBoost DAN To 14.9% Using Options

Shareholders of Dana Inc (DAN) looking to boost their income beyond the stock's 3.1% annualized dividend yield can sell the June covered call at the $15 strike and collect the premium based on the 65 cents bid, which annualizes to an additional 11.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 14.9% annualized rate in the scenario where the stock is not called away. Any upside above $15 would be lost if the stock rises there and is called away, but DAN shares would have to advance 15.4% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 20.4% return from this trading level, in addition to any dividends collected before the stock was called.