YieldBoost Lamb Weston Holdings From 1.8% To 11.6% Using Options

Shareholders of Lamb Weston Holdings Inc (LW) looking to boost their income beyond the stock's 1.8% annualized dividend yield can sell the April 2025 covered call at the $95 strike and collect the premium based on the $2.60 bid, which annualizes to an additional 9.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 11.6% annualized rate in the scenario where the stock is not called away. Any upside above $95 would be lost if the stock rises there and is called away, but LW shares would have to climb 18% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 21.3% return from this trading level, in addition to any dividends collected before the stock was called.