Strategy To YieldBoost FLS From 0.9% To 5.1% Using Options
July 23, 2014 at 12:50 PM EDT
Shareholders of Flowserve Corp. (FLS) looking to boost their income beyond the stock's 0.9% annualized dividend yield can sell the January 2015 covered call at the $80 strike and collect the premium based on the $1.50 bid, which annualizes to an additional 4.2% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 5.1% annualized rate in the scenario where the stock is not called away..