YieldBoost Apogee Enterprises To 13.9% Using Options

Shareholders of Apogee Enterprises Inc (APOG) looking to boost their income beyond the stock's 1.9% annualized dividend yield can sell the August covered call at the $60 strike and collect the premium based on the $3.80 bid, which annualizes to an additional 12% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 13.9% annualized rate in the scenario where the stock is not called away. Any upside above $60 would be lost if the stock rises there and is called away, but APOG shares would have to advance 13.3% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 20.5% return from this trading level, in addition to any dividends collected before the stock was called.