YieldBoost Dominion Energy To 11.7% Using Options

Shareholders of Dominion Energy Inc (D) looking to boost their income beyond the stock's 3.3% annualized dividend yield can sell the April 2022 covered call at the $77.50 strike and collect the premium based on the $3.90 bid, which annualizes to an additional 8.4% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 11.7% annualized rate in the scenario where the stock is not called away. Any upside above $77.50 would be lost if the stock rises there and is called away, but D shares would have to advance 0.1% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 5.2% return from this trading level, in addition to any dividends collected before the stock was called.
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