YieldBoost Owens Corning To 5% Using Options

Shareholders of Owens Corning (OC) looking to boost their income beyond the stock's 1.5% annualized dividend yield can sell the January 2022 covered call at the $80 strike and collect the premium based on the $4.50 bid, which annualizes to an additional 3.5% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 5% annualized rate in the scenario where the stock is not called away. Any upside above $80 would be lost if the stock rises there and is called away, but OC shares would have to advance 25.4% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 32.4% return from this trading level, in addition to any dividends collected before the stock was called.