YieldBoost WEC Energy Group To 8.3% Using Options
June 14, 2024 at 11:34 AM EDT
Shareholders of WEC Energy Group Inc (WEC) looking to boost their income beyond the stock's 4.2% annualized dividend yield can sell the January 2025 covered call at the $85 strike and collect the premium based on the $1.90 bid, which annualizes to an additional 4.1% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 8.3% annualized rate in the scenario where the stock is not called away. Any upside above $85 would be lost if the stock rises there and is called away, but WEC shares would have to climb 8.6% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 11% return from this trading level, in addition to any dividends collected before the stock was called.