YieldBoost BXP From 5.7% To 16.4% Using Options
August 14, 2024 at 11:32 AM EDT
Shareholders of BXP Inc (BXP) looking to boost their income beyond the stock's 5.7% annualized dividend yield can sell the June 2025 covered call at the $72.50 strike and collect the premium based on the $6.30 bid, which annualizes to an additional 10.7% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 16.4% annualized rate in the scenario where the stock is not called away. Any upside above $72.50 would be lost if the stock rises there and is called away, but BXP shares would have to climb 5% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 14.1% return from this trading level, in addition to any dividends collected before the stock was called.