YieldBoost Texas Pacific Land To 19.9% Using Options

Shareholders of Texas Pacific Land Corp (TPL) looking to boost their income beyond the stock's 0.5% annualized dividend yield can sell the July covered call at the $1370 strike and collect the premium based on the $125.00 bid, which annualizes to an additional 19.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 19.9% annualized rate in the scenario where the stock is not called away. Any upside above $1370 would be lost if the stock rises there and is called away, but TPL shares would have to advance 12% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 22.2% return from this trading level, in addition to any dividends collected before the stock was called.