How To YieldBoost Cohen & Steers From 1.8% To 10.4% Using Options

Shareholders of Cohen & Steers Inc (CNS) looking to boost their income beyond the stock's 1.8% annualized dividend yield can sell the June 2022 covered call at the $98.75 strike and collect the premium based on the $5.00 bid, which annualizes to an additional 8.6% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 10.4% annualized rate in the scenario where the stock is not called away. Any upside above $98.75 would be lost if the stock rises there and is called away, but CNS shares would have to climb 0.7% from current levels for that to occur, meaning that in the scenario where the stock is called, the shareholder has earned a 5.8% return from this trading level, in addition to any dividends collected before the stock was called.