How To YieldBoost MEI From 1% To 21.8% Using Options
July 01, 2014 at 12:00 PM EDT
Shareholders of Methode Electronics, Inc. (MEI) looking to boost their income beyond the stock's 1% annualized dividend yield can sell the October covered call at the $40 strike and collect the premium based on the $2.30 bid, which annualizes to an additional 20.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 21.8% annualized rate in the scenario where the stock is not called away..