How To YieldBoost Revvity To 12.8% Using Options
December 19, 2024 at 11:33 AM EST
Shareholders of Revvity Inc (RVTY) looking to boost their income beyond the stock's 0.3% annualized dividend yield can sell the June 2025 covered call at the $115 strike and collect the premium based on the $6.90 bid, which annualizes to an additional 12.6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 12.8% annualized rate in the scenario where the stock is not called away. Any upside above $115 would be lost if the stock rises there and is called away, but RVTY shares would have to climb 4.9% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 11.2% return from this trading level, in addition to any dividends collected before the stock was called.