YieldBoost NOC To 4.2% Using Options

Shareholders of Northrop Grumman Corp (NOC) looking to boost their income beyond the stock's 1.9% annualized dividend yield can sell the January 2026 covered call at the $540 strike and collect the premium based on the $15.10 bid, which annualizes to an additional 2.3% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 4.2% annualized rate in the scenario where the stock is not called away. Any upside above $540 would be lost if the stock rises there and is called away, but NOC shares would have to climb 25% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 28.5% return from this trading level, in addition to any dividends collected before the stock was called.