Strategy To YieldBoost Comfort Systems USA From 0.8% To 7.2% Using Options

Shareholders of Comfort Systems USA Inc (FIX) looking to boost their income beyond the stock's 0.8% annualized dividend yield can sell the July 2020 covered call at the $60 strike and collect the premium based on the $2.15 bid, which annualizes to an additional 6.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 7.2% 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 FIX shares would have to advance 17.2% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 21.4% return from this trading level, in addition to any dividends collected before the stock was called.