YieldBoost CONSOL Energy To 9.3% Using Options
September 23, 2024 at 11:39 AM EDT
Shareholders of CONSOL Energy Inc (CEIX) looking to boost their income beyond the stock's 1% annualized dividend yield can sell the December 2025 covered call at the $115 strike and collect the premium based on the $9.90 bid, which annualizes to an additional 8.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 9.3% annualized rate in the scenario where the stock is not called away. Any upside above $115 would be lost if the stock rises there and is called away, but CEIX shares would have to climb 18.8% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 29% return from this trading level, in addition to any dividends collected before the stock was called.