YieldBoost Yum! Brands To 4.5% Using Options
July 22, 2014 at 11:33 AM EDT
Shareholders of Yum! Brands, Inc. (YUM) looking to boost their income beyond the stock's 2% annualized dividend yield can sell the January 2016 covered call at the $87.50 strike and collect the premium based on the $2.83 bid, which annualizes to an additional 2.5% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 4.5% annualized rate in the scenario where the stock is not called away..