YieldBoost DCOM To 17.7% Using Options

Shareholders of Dime Community Bancshares Inc (DCOM) looking to boost their income beyond the stock's 4.5% annualized dividend yield can sell the March 2025 covered call at the $25 strike and collect the premium based on the $1.75 bid, which annualizes to an additional 13.2% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 17.7% annualized rate in the scenario where the stock is not called away. Any upside above $25 would be lost if the stock rises there and is called away, but DCOM shares would have to advance 13.6% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 21.5% return from this trading level, in addition to any dividends collected before the stock was called.