YieldBoost S&P Global From 1.1% To 9.1% Using Options

Shareholders of S&P Global Inc (SPGI) looking to boost their income beyond the stock's 1.1% annualized dividend yield can sell the February 2018 covered call at the $160 strike and collect the premium based on the $5.10 bid, which annualizes to an additional 8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 9.1% annualized rate in the scenario where the stock is not called away. Any upside above $160 would be lost if the stock rises there and is called away, but SPGI shares would have to climb 2.4% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 5.7% return from this trading level, in addition to any dividends collected before the stock was called.