YieldBoost Crown Castle From 5.3% To 11.4% Using Options
September 18, 2024 at 11:40 AM EDT
Shareholders of Crown Castle Inc (CCI) looking to boost their income beyond the stock's 5.3% annualized dividend yield can sell the January 2026 covered call at the $125 strike and collect the premium based on the $9.60 bid, which annualizes to an additional 6.1% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 11.4% annualized rate in the scenario where the stock is not called away. Any upside above $125 would be lost if the stock rises there and is called away, but CCI shares would have to climb 5.3% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 13.4% return from this trading level, in addition to any dividends collected before the stock was called.