How To YieldBoost Cummins From 1.7% To 3.7% Using Options

Shareholders of Cummins, Inc. (CMI) looking to boost their income beyond the stock's 1.7% annualized dividend yield can sell the January 2016 covered call at the $195 strike and collect the premium based on the $5.20 bid, which annualizes to an additional 2% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 3.7% annualized rate in the scenario where the stock is not called away..