YieldBoost Cato Corp. From 3.2% To 11.3% Using Options
November 14, 2014 at 11:37 AM EST
Shareholders of Cato Corp. (CATO) looking to boost their income beyond the stock's 3.2% annualized dividend yield can sell the April 2015 covered call at the $40 strike and collect the premium based on the $1.30 bid, which annualizes to an additional 8.2% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 11.3% annualized rate in the scenario where the stock is not called away..