YieldBoost Hecla Mining From 0.9% To 7.6% Using Options
December 11, 2024 at 11:40 AM EST
Shareholders of Hecla Mining Co (HL) looking to boost their income beyond the stock's 0.9% annualized dividend yield can sell the January 2026 covered call at the $10 strike and collect the premium based on the 43 cents bid, which annualizes to an additional 6.7% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 7.6% annualized rate in the scenario where the stock is not called away. Any upside above $10 would be lost if the stock rises there and is called away, but HL shares would have to advance 70.9% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 78.3% return from this trading level, in addition to any dividends collected before the stock was called.