YieldBoost Concentrix From 2% To 12.4% Using Options
June 25, 2024 at 11:37 AM EDT
Shareholders of Concentrix Corp (CNXC) looking to boost their income beyond the stock's 2% annualized dividend yield can sell the July 2025 covered call at the $70 strike and collect the premium based on the $6.50 bid, which annualizes to an additional 10.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 12.4% 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 CNXC shares would have to climb 18.2% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 29.2% return from this trading level, in addition to any dividends collected before the stock was called.