Strategy To YieldBoost CMTL To 10.6% Using Options
December 11, 2014 at 11:51 AM EST
Shareholders of Comtech Telecommunications Corp. (CMTL) looking to boost their income beyond the stock's 3.8% annualized dividend yield can sell the July 2015 covered call at the $40 strike and collect the premium based on the $1.30 bid, which annualizes to an additional 6.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 10.6% annualized rate in the scenario where the stock is not called away..