YieldBoost PAYX To 4.9% Using Options

Shareholders of Paychex Inc (PAYX) looking to boost their income beyond the stock's 2.8% annualized dividend yield can sell the January 2027 covered call at the $175 strike and collect the premium based on the $6.40 bid, which annualizes to an additional 2.2% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 4.9% annualized rate in the scenario where the stock is not called away. Any upside above $175 would be lost if the stock rises there and is called away, but PAYX shares would have to advance 23.3% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 27.8% return from this trading level, in addition to any dividends collected before the stock was called.