YieldBoost RGR From 3.6% To 12.9% Using Options
August 26, 2014 at 11:34 AM EDT
Shareholders of Sturm, Ruger & Co., Inc. (RGR) looking to boost their income beyond the stock's 3.6% annualized dividend yield can sell the April 2015 covered call at the $52.50 strike and collect the premium based on the $3.00 bid, which annualizes to an additional 9.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 12.9% annualized rate in the scenario where the stock is not called away..