Strategy To YieldBoost TKR To 14.2%

Shareholders of Timken Co. (NYSE: TKR) looking to boost their income beyond the stock's 1.5% annualized dividend yield can sell the December covered call at the $62.50 strike and collect the premium based on the $3.40 bid, which annualizes to an additional 12.7% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 14.2% annualized rate in the scenario where the stock is not called away. Any upside above $62.50 would be lost if the ...