YieldBoost Teleflex From 0.8% To 1.2% Using Options
December 16, 2024 at 11:38 AM EST
Shareholders of Teleflex Incorporated (TFX) looking to boost their income beyond the stock's 0.8% annualized dividend yield can sell the July 2025 covered call at the $300 strike and collect the premium based on the 50 cents bid, which annualizes to an additional 0.5% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 1.2% annualized rate in the scenario where the stock is not called away. Any upside above $300 would be lost if the stock rises there and is called away, but TFX shares would have to climb 64.9% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 65.1% return from this trading level, in addition to any dividends collected before the stock was called.