YieldBoost Jabil To 58.2% Using Options
June 12, 2024 at 11:33 AM EDT
Shareholders of Jabil Inc (JBL) looking to boost their income beyond the stock's 0.3% annualized dividend yield can sell the June covered call at the $195 strike and collect the premium based on the $1.70 bid, which annualizes to an additional 57.9% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 58.2% annualized rate in the scenario where the stock is not called away. Any upside above $195 would be lost if the stock rises there and is called away, but JBL shares would have to climb 63.8% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 65.2% return from this trading level, in addition to any dividends collected before the stock was called.