YieldBoost Materion Corp To 8.9% Using Options

Shareholders of Materion Corp (MTRN) looking to boost their income beyond the stock's 1% annualized dividend yield can sell the March 2015 covered call at the $35 strike and collect the premium based on the $1.50 bid, which annualizes to an additional 7.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 8.9% annualized rate in the scenario where the stock is not called away. Any upside above $35 would be lost if the stock rises there and is called away, but MTRN shares would have to advance 6.3% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 10.9% return from this trading level, in addition to any dividends collected before the stock was called.