YieldBoost Century Communities From 0.9% To 19% Using Options

Shareholders of Century Communities Inc (CCS) looking to boost their income beyond the stock's 0.9% annualized dividend yield can sell the March 2022 covered call at the $70 strike and collect the premium based on the $5.60 bid, which annualizes to an additional 18.1% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 19% annualized rate in the scenario where the stock is not called away. Any upside above $70 would be lost if the stock rises there and is called away, but CCS shares would have to advance 8.4% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 17.1% return from this trading level, in addition to any dividends collected before the stock was called.