How To YieldBoost John Bean Technologies Corp From 0.4% To 13.4% Using Options

Shareholders of John Bean Technologies Corp (JBT) looking to boost their income beyond the stock's 0.4% annualized dividend yield can sell the April 2018 covered call at the $105 strike and collect the premium based on the $6.70 bid, which annualizes to an additional 13% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 13.4% annualized rate in the scenario where the stock is not called away. Any upside above $105 would be lost if the stock rises there and is called away, but JBT shares would have to advance 2.2% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 8.8% return from this trading level, in addition to any dividends collected before the stock was called.