How To YieldBoost SRE From 2.8% To 13.9% Using Options

Shareholders of Sempra (SRE) looking to boost their income beyond the stock's 2.8% annualized dividend yield can sell the April 2025 covered call at the $90 strike and collect the premium based on the $3.20 bid, which annualizes to an additional 11.1% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 13.9% annualized rate in the scenario where the stock is not called away. Any upside above $90 would be lost if the stock rises there and is called away, but SRE shares would have to advance 2.8% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 6.4% return from this trading level, in addition to any dividends collected before the stock was called.