YieldBoost CFG To 8.5% Using Options

Shareholders of Citizens Financial Group Inc (CFG) looking to boost their income beyond the stock's 2.6% annualized dividend yield can sell the April 2019 covered call at the $45 strike and collect the premium based on the $1.60 bid, which annualizes to an additional 5.9% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 8.5% annualized rate in the scenario where the stock is not called away. Any upside above $45 would be lost if the stock rises there and is called away, but CFG shares would have to advance 8.6% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 12.4% return from this trading level, in addition to any dividends collected before the stock was called.