YieldBoost Cato Corp. From 5.8% To 17% Using Options
March 08, 2017 at 11:56 AM EST
Shareholders of Cato Corp. (CATO) looking to boost their income beyond the stock's 5.8% annualized dividend yield can sell the October covered call at the $25 strike and collect the premium based on the $1.60 bid, which annualizes to an additional 11.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 17% annualized rate in the scenario where the stock is not called away..