How To YieldBoost PM From 4.3% To 10.8% Using Options

Shareholders of Philip Morris International Inc (PM) looking to boost their income beyond the stock's 4.3% annualized dividend yield can sell the June 2025 covered call at the $135 strike and collect the premium based on the $4.10 bid, which annualizes to an additional 6.5% 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 $135 would be lost if the stock rises there and is called away, but PM shares would have to climb 7.4% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 10.7% return from this trading level, in addition to any dividends collected before the stock was called.