How To YieldBoost TPB From 0.5% To 11.2% Using Options

Shareholders of Turning Point Brands Inc (TPB) looking to boost their income beyond the stock's 0.5% annualized dividend yield can sell the April 2025 covered call at the $75 strike and collect the premium based on the $1.95 bid, which annualizes to an additional 10.7% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 11.2% annualized rate in the scenario where the stock is not called away. Any upside above $75 would be lost if the stock rises there and is called away, but TPB shares would have to advance 28.6% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 31.9% return from this trading level, in addition to any dividends collected before the stock was called.