How To YieldBoost RGR From 1.6% To 14.5% Using Options
December 26, 2014 at 11:56 AM EST
Shareholders of Sturm, Ruger & Co., Inc. (RGR) looking to boost their income beyond the stock's 1.6% annualized dividend yield can sell the April 2015 covered call at the $37.50 strike and collect the premium based on the $1.40 bid, which annualizes to an additional 12.9% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 14.5% annualized rate in the scenario where the stock is not called away..