YieldBoost Dell Technologies From 1.7% To 8% Using Options
January 29, 2025 at 11:42 AM EST
Shareholders of Dell Technologies Inc (DELL) looking to boost their income beyond the stock's 1.7% annualized dividend yield can sell the December 2026 covered call at the $150 strike and collect the premium based on the $12.10 bid, which annualizes to an additional 6.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 8% annualized rate in the scenario where the stock is not called away. Any upside above $150 would be lost if the stock rises there and is called away, but DELL shares would have to advance 46.9% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 58.8% return from this trading level, in addition to any dividends collected before the stock was called.