YieldBoost ENR From 2.1% To 17.9% Using Options

Shareholders of Energizer Holdings Inc (ENR) looking to boost their income beyond the stock's 2.1% annualized dividend yield can sell the February 2017 covered call at the $50 strike and collect the premium based on the $2.60 bid, which annualizes to an additional 15.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 17.9% annualized rate in the scenario where the stock is not called away. Any upside above $50 would be lost if the stock rises there and is called away, but ENR shares would have to climb 5.1% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 10.6% return from this trading level, in addition to any dividends collected before the stock was called.