YieldBoost Healthcare Realty Trust To 28.4% Using Options

Shareholders of Healthcare Realty Trust Incorporated (HR) looking to boost their income beyond the stock's 7.5% annualized dividend yield can sell the February covered call at the $20 strike and collect the premium based on the 15 cents bid, which annualizes to an additional 20.8% rate of return against the current stock price (at Stock Options Channel we call this the YieldBoost), for a total of 28.4% annualized rate in the scenario where the stock is not called away. Any upside above $20 would be lost if the stock rises there and is called away, but HR shares would have to advance 21.8% from current levels for that to happen, meaning that in the scenario where the stock is called, the shareholder has earned a 22.7% return from this trading level, in addition to any dividends collected before the stock was called.