Strategy To YieldBoost Innovative Industrial Properties To 32.5% Using Options

Shareholders of Innovative Industrial Properties Inc (IIPR) looking to boost their income beyond the stock's 11.4% annualized dividend yield can sell the April 2025 covered call at the $70 strike and collect the premium based on the $4.10 bid, which annualizes to an additional 21.1% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 32.5% annualized rate in the scenario where the stock is not called away. Any upside above $70 would be lost if the stock rises there and is called away, but IIPR shares would have to climb 5.4% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 11.6% return from this trading level, in addition to any dividends collected before the stock was called.