YieldBoost Enpro To 13.8% Using Options

Shareholders of Enpro Inc (NPO) looking to boost their income beyond the stock's 0.7% annualized dividend yield can sell the December covered call at the $200 strike and collect the premium based on the $14.20 bid, which annualizes to an additional 13.1% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 13.8% annualized rate in the scenario where the stock is not called away. Any upside above $200 would be lost if the stock rises there and is called away, but NPO shares would have to advance 9.8% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 17.6% return from this trading level, in addition to any dividends collected before the stock was called.