YieldBoost Build-A-Bear Workshop From 2.8% To 16.3% Using Options

Shareholders of Build-A-Bear Workshop Inc (BBW) looking to boost their income beyond the stock's 2.8% annualized dividend yield can sell the March 2025 covered call at the $32.50 strike and collect the premium based on the $2.20 bid, which annualizes to an additional 13.5% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 16.3% annualized rate in the scenario where the stock is not called away. Any upside above $32.50 would be lost if the stock rises there and is called away, but BBW shares would have to advance 13.4% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 21.1% return from this trading level, in addition to any dividends collected before the stock was called.